Article 2 Reaction

Article 2 Reaction - growing alarm in the Bank of China and...

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Deflation is a decrease in the general price level of goods and services. Deflation occurs when the annual inflation rate falls below 0%. On the other hand, Inflation is a rise in the general level of prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services. Both can be very risky to our economy. The article tells us about why we are scared because we may be facing one of them. There are two problems causing this, the first one and the most important is the
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Unformatted text preview: growing alarm in the Bank of China and England where their members wanted to raise the rates. The second problem is the unrest in Libya. Even though they account a very small percentage of global oil supply, it can be spread to Saudi Arabia and they hold a greater account compare to Libya. In Conclusion, I think instead of talking about fear we have to be prepared for both of them because no matter which one we have to confront. Either Deflation or Inflation can be dangerous in different ways for our economy....
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