Unit 8 inflation 课件资料财经英语.docxVIP

Unit 8 inflation 通货膨胀 1. Inflation It is a rise in the general level of prices of goods and services. And its opposite is deflation 通货紧缩. 2. Measurement of inflation To measure inflation, a number of goods that are representative of the economy are put together into what is called a “market basket市场一揽子”, which results in a price index价格指数. There are two main price indexes that measure inflation. 1. consumer price index(CPI) 消费者价格指数- a measure of price changes in consumer goods and services such as gasoline, food, clothing and automobiles. 2. producer price indexes(PPI)生产者价格指数- a family of indexes that measure the average change in selling prices by domestic producers of goods and services. 3. Causes of inflation 3.1 demand-pull inflation(excess demand inflation) 需求拉上通货膨胀 It occurs when the total demand for goods and services exceeds the supply of the same. (1) a depreciation of the exchange rate汇率贬值, which increases the price of imports and reduces the foreign price of exports. (2) a reduction in direct or indirect taxation If direct taxes are reduced, consumers have more real disposable income to cause demand to rise. A reduction in indirect taxes will mean that a given amount of income will buy a greater volume of goods and services. (3) the rapid growth of money supply Monetarist economists believe that the root causes of inflation are monetary, which permits an excessive growth of the supply of money beyond needed. 3.2 cost-push inflation 成本推进通货膨胀 There are many reasons why costs might rise: (1) rising imported raw materials costs 进口原材料成本上涨 (2) rising labor costs 劳动力成本上涨 (3) higher indirect taxes imposed by the government 4. Controlling inflation 1. Monetary policy It is the primary tool for controlling inflation. Monetarists emphasize increasing interest rates, while Keynesians emphasize reducing demand, often through fiscal policy, using increased taxation or reduced government spending as wel