Tuesday, 29 September 2009

Homework: The china effect is also having inflationary consequences for the UK economy-how?


So,I'll take as a example an import of all kind of goods from China..
imagine,that China exports to UK goods,but suddenly something happens to China's economics(it can be negative economisc grouth),so china starts to produce less goods,less export to UK..But England need that goods,so therefore UK begins to produce that goods by themselves,of course it is more expensive,and coz UK spends more money to make the same goods(wich imported from China),so the all costs of goods will certainly rise,and we know: inflation-it is rising in prices. And finally UK has an inflation..

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