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Discussion for online Economics class - Essay Example

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The ratio compares prices of basic goods across different periods. Different factors explain the sharp increase in prices of consumer’s goods in American markets. According to Rugaber…
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Discussion for online Economics class

Download file to see previous pages... In this case, the value of currency in circulation surpassed the market value of American products. In addition, inflation may have occurred due to economic stimulus programs initiated by the government. The stimulus program compels people to spend, hence creating short-term inflation.
The CIP index could also have increased due to external forces or forces in the international market. Increase in prices of capital goods such as oil and automobiles could have resulted from competition in the international market. China is overtaking the US as the largest global importer of crude oil and iron ore. Aggressive measures taken by china are causing an increase in prices of consumer goods around the world. These strategies make imports expensive for the US and other developed countries. As the country continues to pay more for its import’s, the price of the dollar has fallen sharply causing an increase in prices of consumer ...Download file to see next pagesRead More
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