Economics

Economics 100

Assignment

Table of contents

1.0 ARTICLE SUMMARY……………………………………1

2.0 INTRODUCTION…………………………………...……1

3.0 ANALYSIS………………………………………..………2

4.1 INFLATION…………………………………………..2

4.2 AGGREGATE DEMAND& SUPPLY………….…….3

4.3 BUDGET DEFICIT AND FISCAL POLICY………...6

4.4 MONETARY POLICY………………………………..8

4.0 CONCLUSION………………………………….…..……10

5.0 REFERENCES…………………………………………….10

1.0 Article summary

The article titled “Vietnam’s economy-- doing battle against inflation” was published on May 5th, 2011 in The Economist. The report mainly talks about that Vietnam has suffered from inflation in many aspects and the measures took by Vietnam’s government and central bank to control it.

2.0 Introduction

Since 2008, the official currency of Vietnam, the dong has been devalued several times which led to the country suffered from inflation. People in Vietnam flocked to store US dollars and gold other than the dong. The commodity prices in the country also has going up a lot and people’s life has been affected a lot. Officials worried about this very much.

In order to fight against the inflation, Vietnam’s government and central bank take measures to deal with it steadily. This report will examine those actions took by Vietnam from the perspective of economy including aggregate demand &supply, budget and fiscal policy and monetary policy.

3.0 Analysis

4.1 Inflation

The inflation in Vietnam’s economy is a big problem for the country now. Generally say, inflation has two typical characteristics: one is the devaluation of the country’s currency, the other is the increase of domestic commodity price. These two things will lead to the decrease in exporting commodities and increase in importing commodities; by this means, it will also affect the supply-demand relationship and leads to the fluctuation of the exchange rate of that country.

“The interaction of inflation and existing rules has powerful...