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Economic Commentary
- Words:
- 737
- Submitted:
- Fri Mar 06 2009
- Mark submitted by Author:
Have a little read: ... Name: Nicole Paulet Piedra Commentary number: #3 Due Date: 03/02/2009 Source: Emma Ross-Thomas, (30/01/2009), European Inflation Rate Falls, Unemployment Increases, Bloomberg.com: News, http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aiRziT71Pbu4 Section: 3, Macroeconomics Word count: 746 words This article talks about a recent increase in the rate of unemployment in the Euro-zone countries due to the fall of the rate of inflation, which was caused by a decrease in the oil and commodity prices. In this commentary, I will analyze the relationship between these two economic problems, discuss their effects and evaluate the possible solutions. Europe's inflation dropped from 1.6% to 1.1% in the last two months. According to economic theory, such a fall in the general price level (PL) is not ideal because it limits economic growth. In this case, the decrease of inflation rate is caused by a raise in the short run aggregate supply (SRAS) due to the fall of the oil and commodity prices. This also reduces the consumer's price
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