Anetial Market Essay Example | Topics and Well Written Essays - 1500 words

Anetial Market - Essay Example Inflation is a measure of changes in prices over a specified period and the objective of the monetary policy is to set the interest rate so that inflation can be brought back to target within a reasonable duration. Bank rate is therefore an essential tool used by the Bank of England to control the inflation rate. When Bank believes inflation is beginning to rise, it raises interest rates to cool the economy and vice versa. However this formula has many exceptions as proved by the recent rate cuts by the Bank of England. Although factory gate inflation (based on prices of good leaving factory) reached a 16 year high in December 2007 influenced by rising oil and food prices and CPI stood at 2.1 %, the Bank still went ahead with rate cut. It is interesting to understand why. Although bank rate is used as a tool to control inflation, it is first important to understand that there are different ways of measuring inflation. The Consumer Prices Index (CPI) and Retail Prices Index (RPI) are used in UK to measure inflation and usually have separate values. This is because of the difference in goods and services they cover and the method of calculation. The Government inflation target, which is currently 2%, is based on CPI. ... aper the most important difference that needs to be considered is that CPI does not include certain housing costs, such as mortgage interest payments. The reasons for the rate cut was not a isolated decision by the Bank of England but was influenced by the crisis in the global financial market as a result of what has now come to be known as subprime mortgage crisis. Subprime is the general term used to refer to lending to borrowers who do not normally qualify for standard market rates for various reasons such bad credit history or lack of stable income. Obviously these borrowers are a greater risk to the financial institutions. For many years, Cleveland in America was the major market for the sub-prime lenders where the brokers informed the residents that they could obtain cash by refinancing their homes, "but often neglected to properly explain that the new sub-prime mortgages would reset after 2 years at double the interest rate" (BBC, 2007). As the home owners were subsequently unable to afford repayments, this resulted in a wave of repossessions. As the sub-prime lending had spread across America, the same story has been repeated. As many borrowers defaulted on payments, the financial institutions felt the credit crunch which reflected on other developed economies such as UK. The lenders in UK tightened their loan conditions in response to the US financial slump, especially in the sub prime market which has influenced the price of property in UK. The profitability of the financial services sector, which has been a key driver of UK economic growth in recent years, has also been affected. As the housing demand in UK showed a decline, this resulted in a general fear of economic slowdown. At this stage, the Bank of England faced a dilemma between a rise

Commerce Education Essay Example | Topics and Well Written Essays - 1000 words

Commerce Education - Essay Example I think that Commerce assist form the foundations youthful people need to make sound decisions on monetary, commerce, legal and service issues because it supply practical knowledge, skills, sympathetic and values. Having information regarding these concepts and how to apply them is helpful for young adults to study early. "With changing times, the need to give young people a grip on money management has increased... More than a third of school students' work, and two-thirds of 15 to 19-year-olds earn up to $200 a week. Not all know how to handle that income" (Russell, 2004; Age). Furthermore, Commerce offers students with "and understanding of the relations between consumers, trade and governments in the in general economy" (Board of Studies, NSW, 2003). These are subjects that they may not unavoidably think regarding, even though they previously earning and spending currency. If we analyzed then we come to know that Consumer Affairs Victoria (CAV) conducted investigation last year to find out how customer education is taught in Australia and abroad in order to assist design a program to get better financial literacy amongst teenagers. "Young Australians stand for a $4 billion a year profitable market. Through more spending power then preceding generations, youthful children and adolescents are increasingly the target group for different forms of marketing practices and commercial pressures" (CAV, 2004). It is significant that adolescent adults are conscious of their rights and farm duties as consumers because they are previously purchasing products such as mobile phones and cars that frequently comprise multifaceted contracts. A key finding from the research was that lots of students do not take delivery of consumer education at school. I feel that Commerce education is generally delivering the right kind of educational experiences for the current generation. I do although agree that young adults would most definitely benefit if the curriculum added a more in-depth unit on financial literacy and consumer education. We are living in a constantly changing world and society must provide our children with education that will prepare them for a life of revelation. No doubt, this literature suggests that in the prospect "the curriculum will be justified in terms of its capacity to help children acquire skills for work and life" (Collins, 2002, pg 45). So the financial system and society of the future have to be taken into account when developing commerce prospectus. The main concepts urbanized in the Economy and society thread include: Civics and communal organization, Citizenship, Economic organization and decision-making, Employment,