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#1
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Help in understanding economics terms needed
http://www.dawn.com/wps/wcm/connect/...t-rate-cut-619
Could someone please translate the above article in simple english, it's terribly hard for me to understand the gist of the article because I have never studied economics and don't know the meaning of the difficult terms/jargon used in it. |
#2
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@Mubashir Asif
I have read the article. Can you explain which terms are difficult. I would try to explain. However in simple english it means that SBP has decided to reduce interest rate from 13 percent to 12.5 percent. A decrease in interest rate means that more money is available in the economy. More money is good and bad for the economy at the same time. It is good because investors will find more money to increase investment and there will be more business and economy will grow. It is bad because more money will increase the prices of goods and thus consumers will suffer. It can also affect our international business, it is because when there is more money, then our rupee value will decrease (for example rupees value of a dollar is currently 83.5, but if we have more money in our economy its value may decrease to say 90 Rs a dollar). The decrease in Rupee value means our imports (things we buy from foreigners) will be more expensive and exports (things we sell to foreigners) more cheaper. So our trade deficit (deficit in our international trade) will increase, which is a bad thing . I tried to make it much simpler. Hope you can now understand. Regards |
The Following 3 Users Say Thank You to New Student For This Useful Post: | ||
idresee (Wednesday, December 23, 2009), Jahangiryounus (Thursday, November 26, 2009), Mubashir Asif (Thursday, November 26, 2009) |
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