Deflation and World Trade Organization: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
(Add quote - source - Bank of England - https://www.bankofengland.co.uk/explainers/what-is-deflation#:~:text=When%20prices%20begin%20to%20fall,likely%20to%20make%20less%20profit.)
 
(Layout.)
 
Line 1: Line 1:
''Economics''.
(WTO).


A situation in which prices generally are falling.
The WTO is an international forum for negotiating trade agreements between governments.


In other words, inflation is negative.
In simple terms, its overriding purpose is to help trade flow as freely as possible, so long as there are no undesirable side effects.




Central banks are generally tasked with aiming to ensure a small positive rate of inflation, and to steer the national economy away from deflation.
The WTO was established in 1995 and incorporates the General Agreement on Tariffs and Trade (GATT).




:<span style="color:#4B0082">'''''How deflation can lead to recession'''''</span>
==See also==
 
*[[Carbon Border Adjustment Mechanism]] (CBAM)
:"What would you do if you knew the £100 bike you wanted to buy today, was going to be reduced to £90 tomorrow?
*[[European Free Trade Association]]
 
*[[Financial Services Committee]]
:You would probably wait to buy it for the cheaper price.
*[[Free trade]]
 
*[[General Agreement on Tariffs and Trade]]  (GATT)
: When prices begin to fall, people expect they will continue to go down.
*[[International trade]]
 
*[[Tariff]]
:This expectation results in people spending less today, in hope of buying at a cheaper price tomorrow.
*[[The role of the OECD export credit agencies]]
 
*[[Trade Facilitation Agreement]]
:This is bad for businesses.
*[[Trade finance]]
 
*[[Trade war]]
 
*[[WTO rules]]
:If prices fall, businesses are likely to make less profit.
 
:Businesses don’t like to see their profits fall, so they will try to do something about it.
 
:Let’s go back to that bike you wanted to buy.
 
:The owner of the bike shop is now getting £10 less for each bike and so may try to cut costs to make up for this loss.
 
 
:This is where deflation can negatively affect employees.
 
:Businesses’ biggest cost is usually staff.
 
:To reduce staff costs, businesses have two options: to cut wages or staff numbers.
 
:In other words, deflation could lead to you losing your job.
 
 
:If prices fall on a large scale, then there may be many job losses.
 
:People typically spend less when their incomes fall, so they might not be able to afford the bike at £90.
 
:So now, the business could be forced to cut prices further in order to sell anything at all.
 
:This creates a spiral effect as prices need to be reduced again and with falling income, comes unemployment if businesses can no longer afford to keep workers.
 
This spiral of falling prices and unemployment is often associated with a recession."
 
:''Bank of England - What is deflation?''
 
 
== See also ==
* [[Central bank]]
* [[Depression]]
* [[Hyperinflation]]
* [[Inflation]]
* [[Lowflation]]
* [[Recession]]
* [[Stagflation]]




==External link==
==External link==
[https://www.bankofengland.co.uk/explainers/what-is-deflation#:~:text=When%20prices%20begin%20to%20fall,likely%20to%20make%20less%20profit.https://www.bankofengland.co.uk/explainers/what-is-deflation#:~:text=When%20prices%20begin%20to%20fall,likely%20to%20make%20less%20profit. Bank of England - What is deflation?]
[https://www.wto.org/english/thewto_e/thewto_e.htm The World Trade Organization (WTO) - about us]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_products_and_markets]]
[[Category:Financial_products_and_markets]]
[[Category:Identify_and_assess_risks]]
[[Category:Risk_frameworks]]
[[Category:The_business_context]]
[[Category:The_business_context]]

Revision as of 19:02, 11 October 2023

(WTO).

The WTO is an international forum for negotiating trade agreements between governments.

In simple terms, its overriding purpose is to help trade flow as freely as possible, so long as there are no undesirable side effects.


The WTO was established in 1995 and incorporates the General Agreement on Tariffs and Trade (GATT).


See also


External link

The World Trade Organization (WTO) - about us

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Deflation&oldid=53339’