The economic situation of a country. Changes to be made.
Population is high, so many people demanding a better lifestyle; a better standard of living.
What is this? What do they really want? Money, and of course, with money comes power. In the case of an economic analysis, consumers’ “purchasing power".
What is that? Something happening to a balloon? Well, no, in economics, it means, Consumer Price Index is being affected.
Consumer Price Index affects consumers’ “purchasing power" directly. The reason could be seen as a simple situation which happens within the country itself, or from foreign countries.
The simple situation:
- When you, your peers, and eventually your immediate family begins investing in the stock markets and property investments, the favorable result is reliant on the prices of property or the stocks. The resultant effect is an internal caused inflation. This is caused by the rising prices of stocks and property, resulting in the amount of money increasing as investors gain more profit. The more complex situation, regarding foreign markets: In addition, if the country is very reliant on imports, which feeds the local businesses and consumers. Increment in prices from the foreign markets will affect the LOCAL economy.
Reason: Imported inflation
The local economy is affected as the imported goods and services from foreign countries become part of the local economic scene.
The high price of imported goods and services directly affects the country, as local consumers have to pay an increment in costs. This higher cost is the result of foreign imported goods and services.
More money, more problems
This seems to be a relative cause of inflation and the rise in cost and consumer prices of:
- foreign imported goods and services
- stocks and property in the local economy.
However, this is the truth, as long as people, find jobs and are paid salaries, which do not rise with the inflation rate in the local economy; will suffer.
As, the unchanging wage rate in comparison to the increased consumer prices of goods and services, causes a strain on consumers’ “purchasing power".
Change this POWER, and this works for you.
Stanley Lai is a cancer survivor who achieved in an awkward way and lived on. He now writes articles to inspire others and help them to overcome challenges in life.
Here is where you can find out more about Learn, cope