Reserve Bank Govener Questions

[koosdoos]

Hi Guys

Say you were the reserve bank govener for a country how would you address the following:

1) Inflation

2) Unemployment


Thanks !!!

[savio13]

Originally Posted by koosdoos

Hi Guys

Say you were the reserve bank govener for a country how would you address the following:

1) Inflation

2) Unemployment


Thanks !!!

Hello there….

It seems you were looking for Inflation and Unemployment

INFLATION:

According to the 2008 Economic Survey Report, India’s inflation rate was targeted by the Reserve Bank of India (RBI) to be 4.1%, down from a rate of 5.77% in 2007. Inflation rates for many investment goods have decreased dramatically in recent years. The price of basic goods such as lentils, vegetables, fruits and poultry were expected to slow their rise. The price of various manufactured goods also fell in 2007, and this contributed to a reduced inflation rate

However, the beginning of 2008 has seen a dramatic rise in the price of rice and other basic food stuffs. There has also been a no-less alarming rise in the price of oil and gas. When coupled with rises in the price of the majority of commodities, higher inflation was the only likely outcome.

Indeed, by July 2008, the key Indian Inflation Rate, the Wholesale Price Index, has risen above 11%, its highest rate in 13 years. This is more than 6% higher than a year earlier and almost three times the RBI’s target of 4.1%.

Inflation has climbed steadily during the year, reaching 8.75% at the end of May. There was an alarming increase in June, when the figure jumped to 11%. This was driven in part by a reduction in government fuel subsidies, which have lifted gasoline prices by an average 10%.

The Indian method for calculating inflation, the Wholesale Price Index, is different to the rest of world. Each week, the wholesale price of a set of 435 goods is calculated by the Indian Government. Since these are wholesale prices, the actual prices paid by consumers are far higher.

In times of rising inflation this also means that cost of living increases are much higher for the populace. Cooking gas prices, for example, have increased by around 20% in 2008.

With most of India’s vast population living close to – or below – the poverty line, inflation acts as a ‘Poor Man’s Tax’. This effect is amplified when food prices rise, since food represents more than half of the expenditure of this group.

The dramatic increase in inflation will have both economic and political implications for the government, with an election due within the year.


UNEMPLOYMENT:

Unemployment is widely regarded as a major social and economic global problem. When referring to someone as unemployed, most people have in mind a state consistent with the International Labour Office's (ILO) definition, namely a person who does not have a job, is available for work, and is actively looking for work (ILO 1998). This is certainly the case for government agencies, like the Bureau of Labor Statistics in the United States, that publish unemployment statistics. These statistics are used in a variety of situations, but mostly as an indication of the underuse of a nation's resources, and to inform on the economic and social hardship associated with the absence of employment. The data listed in Table 1 show that unemployment rates are high for most countries. These high unemployment rates have been extensively studied. See, for example, Richard Jackman (1997a) for OECD countries, Richard Jackman (1997b) for Central and Eastern Europe, Albert Berry, Maria Mendex, and Jaime Tenjo (1997) for Latin America, and Anh Le and Paul Miller (2000) for Australia. The findings from this research indicate that the unemployment experience is now very well documented.

Most of the people who become unemployed remain without work for very short periods. However, there is also a hard core of unemployed who remain without work for long periods of time. The adverse consequences of unemployment are much more acute for this group.

Hope these will meet your requirements:

->Unemployment - Consequences Of Unemployment, Problems With The Statistics, Who Becomes Unemployed?, Solutions To The Unemployment Problem



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