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Essay

Impacts Of Inflation

Essay specific features

 

Issue:

Business

 

Written by:

Daniel C

 

Date added:

June 26, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 722

 

Was viewed:

1838 times

 

Rating of current essay:

 
Essay content:

These changes in financial markets affect consumer and business demand and in turn output. Changes in demand and output then impact on the labour market - employment levels and wage costs - which in turn influence producer and consumer prices. When interest rates are changed, demand can be affected in various ways: It can affect spending and saving decisions...
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At higher interest rates, clients have less money to spend, due to the increased cost of borrowing. (Most people have loans, which they have to service every month, so if rates rise, monthly instalments increase and there is less money available for other things.) Spending by consumers in the shops and spending by firms on new equipment will therefore decrease...
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