Exporters Importers Savers Borrowers

Slides:



Advertisements
Similar presentations
Impacts of inflation.
Advertisements

Effects of Inflation explain the effects of inflation on households and firms explain the effects of inflation on growth and trade.
 How does demand and supply change when things happen in the economy, like:  Inflation  Unemployment  Levels of spending  Real output  We look at.
Exchange Rate - An exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regards as the value.
Why Some Inflation is Better Than Deflation. Some Benefits of Low Inflation: Inflation causes real interest rates to be lower than nominal interest rates.
IGCSE®/O Level Economics
A2 Business Studies – External Influences Economic opportunities and constraints.
Chapter 8 Presentation 2. Determinants of Consumption and Saving ***The amount of DI is the basic determinant of consumption and saving There are also.
Essential Standard 1.00 Understand the role of business in the global economy. 1.
Understand the role of business in the global economy. 1 All Images Compliments of
Essential Standard 1.00 Understand the role of business in the global economy. 1.
No 03. Chapter 2 Measuring Macroeconomic Variables.
ESSENTIAL STANDARD 1.00 UNDERSTAND THE ROLE OF BUSINESS IN THE GLOBAL ECONOMY. 1.
C H 33 C ONSEQUENCES OF I NFLATION. I NFLATION … SO WHAT ? Brainstorm the stakeholders in an economy; list on the board Consumers, producers, government,
Chapter Inflation and Capital Investment Analysis
Inflation and Monetary Policy. The NZ Financial System Government Banks with Reserve Bank of New Zealand (RBNZ) The Public Banks with Registered banks:
Essential Standard 1.00 Understand the role of business in the global economy. 1.
Objective 1.02 Understand economic conditions 1 Understand the role of business in the global economy.
Effects of Inflation explain the effects of inflation on households and firms explain the effects of inflation on growth and trade.
Essential Standard 1.00 Understand the role of business in the global economy. 1.
Monetary Policy Tools Describe how the Federal Reserve uses the tools of monetary policy to promote price stability, full employment, and economic growth.
Essential Standard 1.00 Understand the role of business in the global economy. 1.
Aggregate Demand IB Economics Chapter 14. Learning Objectives At the end of this chapter you will be able to  Understand the meaning of aggregate demand.
Goal #3 LIMIT INFLATION Country and Time- Zimbabwe, 2008 Annual Inflation Rate- 79,600,000,000% Time for Prices to Double hours Copyright ACDC Leadership.
Cost-Push Inflation Firms respond to higher costs by increasing prices (AS shifts inward) AD AS AS 1 PL GDP Causes: ↑imported raw material costs ↑ labour.
Coping with Economic Challenges
Module 27 & 28 & The Federal Reserve Monetary Policy
The Loanable Funds Market
Evidence of economic growth Consequences of Economic growth
The impact on a business of higher interest rates
2 Economic Activity 2-1 Measuring Economic Activity
Cash Flow Forecasts This shows the WHEN of cash coming in and cash going out during a certain month and year.
Analyze cost/profit relationships to guide business decision making.
Understand the role of business in the global economy
Who is hurt and who is helped by Inflation?
Unit 4: Money, Banking, and Monetary Policy
Lecture 13: Balance of Payments Benjamin Graham
The Money Market Lesson 32 Sections 28, 29.
Calculating Nominal GDP, Real GDP, and Inflation
Inflation = “a sustained increase in the general price level leading to a decrease in the purchasing power of money” PRICE Part Two!
Circular Flow Diagram The Circular flow diagram shows the relationship and interdependence between sectors of the economy Five Sectors: Households: A person.
The cost of borrowing money and the return for lending money.
Understand the role of business in the global economy.
Why the AD curve slopes down
Cost-Push Inflation Firms respond to higher costs by increasing prices (AS shifts inward) Causes: ↑imported raw material costs ↑ labour costs ↑ indirect.
Economics 2.3 Growth Assignment 2
How does inflation affect us all? AS Business
WARNING!!!!!!!!!!!!!!!!!!!!!!!!! THE MOST IMPORTANT FACTOR IN DETERMINING FOREIGN EXCHANGE IS INTO WHICH NATION IS THE MONEY FLOWING. The currency of.
Unit 4: Money, Banking, and Monetary Policy
What is Inflation? Why is the rising cost of child care an issue?
Government Taxing and Spending
Unit 4: Money, Banking, and Monetary Policy
Inflation.
Unit 4: Money, Banking, and Monetary Policy
Inflation Rising prices.
Economics: Notes for Teachers
Unit 2: Macro Measures 1.
Market for Loanable Funds
Unit 4: Money and Monetary Policy
Understand the role of business in the global economy.
ECONOMIC PROBLEMS OF THE 1920s
Economic Effects of Export Subsidies in a Small Country
The Circular Flow and GDP
Deflation What you must be able to do:
Understand the role of business in the global economy.
The Market Mechanism – Supply and Demand
Why are we here? Understand about the market as a first home buyer Clarify the common myths that are out there What affects the ability to borrow.
The Impact of Interest Rates
Inflation Part II.
Presentation transcript:

Exporters Importers Savers Borrowers IMPACT of DEFLATION Exporters Importers Savers Borrowers

Exporters: Positive Impact Exports become price competitive in the international market – more affordable in overseas destinations therefore exports will increase - export receipts increase. New Zealand exporters’ revenue and profitability will increase due to decreasing cost of production in the domestic market

Importers: Negative Impact Imported product is less price competitive than local products therefore price sensitive consumers will purchase local/domestic products in preference to overseas goods. Local goods will begin to make up a larger market share and there will be a decrease in demand for overseas product. As a result importers will find sales revenue declining.

Savers: Positive Impact Deflation will mean that the value of money increases (purchasing power increases) rather than decreases as it does for inflation. Savers would be able to purchase more with their savings than when they initially put their money in the savings account

Borrowers: Negative impact As the value of money (purchasing power) increases during a period of deflation the real value of debt is going to increase. When borrowers are going to pay off their loans, they will find the value of the goods they bought has become cheaper.