IMPORTANT !!! BENEFICIAL TO EVERYONE !!! Explain Economic Growth and Inflation.

Essay by andrewhuiCollege, UndergraduateA+, June 2005

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For economic growth,in 1990 to 1997, it has a strong economic growth in Asia, but it did not help forecast the crisis from 1997. Due to the financial storm happened in 1997, the GNP growth fell 2.9 percent in 1998.

The GNP means the market value of final goods and services newly produced by domestically owned factors of production. Moreover, it is not only the better way to reflect the economic situation of an economy but also is an important source of information for the government and private enterprise to formulate their policies.

However, only GNP cannot indicate the living standard of a country. We have to consider the size of its population. A better way is to measure from the per capita GNP of the country.

On the other hand, as an example in Brazil, the government tried to slow down inflation by instituted a new currency in 1993 in order to make adjustments and under control the economy.

When the Russian financial crisis hit in 1998, Brazil was affected deeply as well because Brazil had instituted the currency tend to devalue its currency. Therefore, it is the crucial factor that the errors of the government's implementation tend to the deflation in the country and it will profoundly influence the economy in the future. That's why Brazil's economy will become worsen again.

Besides, the currency in Hong Kong is related to the United States called the link exchange rate system. From September 11, the terrorist attack the World Trade Centre in New York, the stock market had a sudden slash affected from this event. Moreover, it directly impacts the currency between Hong Kong and United States as well as the stock market.

Those are following the growth prosperity is higher production cost and decline competitiveness of products. The growth...