Economics
University of Nevada Las Vegas Inflation in Venezuela Macroeconomic Discussions

University of Nevada Las Vegas

Question Description

Help me study for my Economics class. I’m stuck and don’t understand.

It can be short, it does not have to be really long.

1. Find a news article on a country that experienced inflation and summarize the article, adding the link if possible. What did you find interesting?

2. Find a news article describing the value of a dollar against a foreign currency and explain it, adding the link if possible. Describe the factors that affect the exchange rate between the dollar and that currency.

3. Is having a strong dollar against the Chinese Yuan a good thing for the US? Why or why not?

4. Explain how a national focus on increasing productivity affects the economy by drawing and uploading an image of the AS-AD model.

5. Take those 10 items in your basket and find the price of each item. Calculate the price of the basket. Explain what this new price means and identify reasons why it changed or did not change.


Product

Old Price

Current Price

Coffee

$20

$20.25

Milk

$15

$15.75

Bread

$10

$10.50

Egg

$30

$31.25

Beef

$35

$37

Pork

$25

$28

Butter

$10

$10.50

Beer

$30

$33.25

Butter

$15

$15.75

Tomatoes

$5

$7.75

Total

$195

$210

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Final Answer

Attached.

Running header: MACROECONOMIC DISCUSSIONS

Macroeconomic Discussions
Student’s Name
Institutional Affiliation
Course

MACROECONOMIC DISCUSSIONS

2
Question 1

Inflation is the worst nightmare a country's economy can find itself in. Inflation is
characterized by a continuous increase in the prices of products over a long period. All over the
world, different countries have, at one time, found themselves under inflation. Among the worsthit countries is Venezuela. The current Venezuela economy is considered to be in tatters, and the
South American country has been hit by a political crisis. According to records from the Central
Bank of Venezuela, in the third quarter of the year 2018, the GDP contracted a historical 22.5%
over the previous year. A more worrying revelation is that there was a reduction of Venezuela's
economy by approximately half within a period of five years from 2013 to 2018. For a long time
now, the inflation rate in Venezuela has been out of control. According to new data, this rate hit
130,060% in the year 2018. Venezuela has been decimated by runaway inflation. The
population's despair has been deepened by the fact that wages and money have become worth
less and less.
Link: https://edition.cnn.com/2019/05/29/economy/venezuela-inflation-intl/index.html
Question 2
For many years, the British pound has been dominant in terms of value against the dollar.
However, the pound has been depreciating in value against the dollar. According to an article by
Ben Chapman, the recent coronavirus outbreak has made the pound to fall to its lowest level
against the dollar in the past 35 years (Chapman, 2020). Many factors affect the exchange rate
between the US dollar and the pound. The first factor is the economic growth rates of the USA
and the UK. Generally, if the GDP of one country grows at a faster rate than the other country,
its currency becomes stronger. Today, the US economy is growing at a faster rate than in the UK.
This has been made possible by many factors, among them being a cut in taxes. This offers

MACROECONOMIC DISCUSSIONS

3

businesses and consumers more money to spend. Political stability is the other factor affecting
the exchang...

TeacherAli (16743)
UCLA

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