
If inflation starts to increase to a point in which the government feels they need shift their number one macroeconomic objective to price stability at the expense of unemployment, they can use this situation of a high current account surplus to tackle inflation. This can occur if the protective barriers on the goods import into the country, such as tariffs, are decreased. Because of this, more goods will be imported into the Netherlands, which will bring down inflation. The cheaper prices of the imported goods will slightly decrease the prices of goods supplied by domestic producers receivable to competitive reasons, which will reduce inflation. Therefore, the government does not have to go back into deficit and the interest rates will not have to be changed for the entire EU only when for the current economic situation of the Netherlands. However, this should only be the theme if inflation keeps increasing, because as inflation... If you want to get a practiced essay, order it on our website: Orderessay
If you want to get a full essay, wisit our page: write my essay .
No comments:
Post a Comment