http://www.youtube.com/watch?v=t_LWQQrpSc4

Inflation & balance of payments

Inflation rates

Thailand 3.4%UK 3.1%Malaysia 2%Cambodia 18.7%Indonesia

Inflation

Low Inflation

InflationThailand’s Inflation Rate

The inflation rate in Thailand was last reported at 3.40 percent in July of 2010. From 2000 until

2010, the average inflation rate in Thailand was 2.51 percent reaching an historical high of

9.20 percent in July of 2008 and a record low of -4.40 percent in July of 2009. Inflation rate

refers to a general rise in prices measured against a standard level of purchasing power. The

most well known measures of Inflation are the CPI which measures consumer prices, and the

GDP deflator, which measures inflation in the whole of the domestic economy.

Inflation rates

“inflation” refers to a general rise in prices measured against a standard level of purchasing power.

Inflation is measured by comparing two sets of goods at two points in time

Related concepts include: Deflation - a general falling level of pricesDisinflation - the reduction of the rate of inflationHyper-inflation - an out-of-control inflationary spiralStagflation - a combination of inflation and poor economic growthReflation - An attempt to raise prices to counteract deflationary pressures.

Nurses case study1 – cut down2 – fold in half3 – stick in neatly

4 – answer the following questions

•If a nurse gets paid £19,000 per annum, how much more money is 2.75%? (show your working out)

•Explain what is meant when the article states that in real terms, nurses are facing a pay cut.

5 – Q&A UK inflation measures

Economic growthThailand’s GDP = $272.43bn

Laos’s GDP = $5.4bn

Cambodia = $10.35bn

Malaysia = $221.77bn

India = $1.16trn

America’s GDP = $14.3trn

UK’s GDP = $2.67trn

unemployment

Unemployed people do not contribute towards the economy, but actually cost the economy money

The lower the unemployment the better.UK August = 7.8%.Thailand August = 1.4%

Balance of payments

ExportsImports

฿20 ฿10

Deficit = ฿10฿80

฿120

Surplus = ฿40

Balance of paymentsThailand $3bn surplus (2001)

UK $25bn deficit

India $1.1bn surplus

America

Cambodia

Malaysia

Indonesia

Homework7 (a) Analyse the benefits to your country’s economy from a multinational manufacturer of computers locating a new factory there.

LO

Explain how government intervention such as:

•Fiscal policies

•Monetary policies

can influence the economy.

Government interventionMost countries have a mixed market economy. The government will have some influence on the performance of the economy.

Fiscal policy Monetary policy

Spending & taxation

Interest rates

2 minute discussion

End

1.1 Starting a Business Enterprise

Discuss with the person next to you, what effect your ‘card’ would have on the economy.

The economic cycle

Increase in GDP

Increase in

inflation

Monetary policy

Economy slows down

Decrease in GDP

Fiscal policy

Economic cycleNow complete the economic cycle, using these boxes to help you.

Increase in GDP

Decrease in GDP

Unemployment at

its highest

Increase interest

rates

Increase unemployment

People spend

less

Increase public

spending

Increase in

inflation

Business make

less sales

Business reluctant

to expand /

open

Reduce taxes

Homework

Complete inflation work sheet, answering all 4 questions.

What have we learnt?

Discuss with a partner before you

share it with the class