ECO403 GDB Fall 2020 Solution / Discussion Last Date: 22-12-2020
The prices of food in the country have risen radically throughout the year. The rise in the prices of wheat flour, sugar, vegetables and pulses are stimulating inflation in the country. There are several reasons behind the increasing food inflation in Pakistan. A main reason of rising inflation is that the economy of Pakistan had been undergoing broad-based inflationary forces during the past years due to the execution of stabilization policies intended to reduce the deficits in current and fiscal account. The pandemic of COVID-19 disrupted food supply chains which also caused high rates of inflation. The decrease in the production of major and minor food crops, predominantly wheat caused a huge decline in the supply and leads to rise in inflation.
Requirement: Logically discuss the effects of high inflation on the economy of Pakistan? You are required to discuss only two effects.
due date is 22.12.2020
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