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| Topic: |
Business
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| Number of pages / Number of words: |
7 / 1772 |
Essay's paper body
An increase in the price of oil (due to OPEC artificially limiting supply) will lead to inflation. Because oil and subsequently fuel is a necessity for most people rather than a luxury, an increase in price won’t necessarily hold back the demand.
Perceived inflation effects inflation as if people are thinking that there is going to be an increase in inflation, they will demand higher wages...
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If the company starts giving higher wages they will have to make up for the money increase in the wages by charging the consumers more on goods or services. Thus there is an increase in Inflation.
The value of the pound, whether strong or weak has a huge effect on inflation. This is due to price paid for imports are mainly in sterling...
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