Question

Before 2006-07, China’s GDP was able to grow at 8-10% with only moderate inflation. In 2006-07,...

Before 2006-07, China’s GDP was able to grow at 8-10% with only moderate inflation. In 2006-07, some Chinese economists were arguing for more growth policies. However, with a GDP growth rate beyond 11% in 2007, China’s inflation surged rapidly to a peak of 8.7%. Use your answers in part (a) and part (b) to explain why (i) before 2006-07, China was able to grow at 8-10% with only moderate inflation; and (ii) there was a rapid surge in China’s inflation in 2007. What kind of assumption is implicit in the above Chinese economists’ argument for more growth policies? Is it a good assumption?

Homework Answers

Answer #1

Answer

China GDP was able in 2006 to 2007 by rate of 8 to 10 % with moderate INFLATION but with a gdp growth in the 2007 beyond 11 % the inflation also increased in China rapidly at 8.7 %A sustained rise in prices is known as inflation. A large rise in prices / higher inflation rate is often caused by economic growth.Inflation often increases when economies experience booms in the economy.it is possible to have economic growth without rising inflation. If economic growth is close to the long run trend rate if demand increases at a similar rate to supply.

Thump up for the answer and ask your doubts friends .

All the very best for the examination

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation. case:    W17400 APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF GROWTH Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...