OUTLINE FORM (DRAFT) NAME: THIVYAH A/P NANTHAKUMAR GROUP: 116
MATRIC NO.: 217098
1. Based on your chosen topic, construct an outline of two body paragraphs. Your thesis statement, topic sentences, supporting sentences and concluding sentences must be written in COMPLETE SENTENCES. The supporting details may be written in POINT FORM. 2. In your supporting details, provide the reference sources in APA style. You should have at least two references for each paragraph.
TOPIC: THE CAUSES OF INFLATION
Thesis Statement: The causes of inflation are cost-push inflation and demand-pull inflation.
Topic Paragraph 1 Paragraph 2
Sentences:
The first cause of inflation is cost-push inflation. Another cause of inflation is demand-pull inflation.
Supporting SS1: Production costs rise when the price of imported or SS1: When a nation's money supply expands faster than its Sentences & Supporting domestic inputs (such as raw materials or oil) rises. economic output, inflation takes place. In this case, the Details 1: Businesses often produce less and raise the pricing of their amount of money in exchange within an economy has goods and services because of having to pay more for each increased more than the number of products created. In this unit of output. The prices of other goods and services may structure, there is now more money chasing fewer goods. rise as a result, creating a chain reaction of prices. Aside from the money supply, other factors can also have an
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SD1: Javed et al. (2010) state the costs of imported raw impact on inflation, which is the average rate of growth in the materials have a significant impact on inflation, and the cost of goods and services over time. positive indication suggests that when raw material prices rise in foreign markets, the domestic price level rises as well. SD1: According to Christensen (2001), there is a long-term, For instance, increasing oil prices will initially result in higher direct, or positive correlation between the money supply and petrol costs since oil is a major input in many economic the rate of inflation. In a money market, an increase in the sectors. money supply will also result in a rise in the demand for products and services. Therefore, the inflation problem will arise from more money being chased after fewer products and services.
Alvarez et al. (2001) state that the Central Bank would surely lower interest rates concurrently with its decision to expand the money supply in the market. Because of this, there will be an inflationary problem because the money supply in the market is growing endlessly.
References- Javed, Z. H., Farooq, M., & Akram, S. (2010). Cost-push Christensen, M. (2001). Real supply shocks and the money APA style: shocks and inflation: An empirical analysis from the growth–inflation relationship. Economics Letters, (for economy of Pakistan. Journal of Economics and 72(2001),67-72. supporting International Finance, 2(12), 308-312. https://www.sciencedirect.com/science/article/pii/S016 detail 1) http://www.academicjournals.org/JEIF 5176501004037
Alvarez, F., Robert, E. L. Jr., & Weber, E. W. (2001). Interest
Rates and Inflation. Source: The American Economic Review, 91(2), 219-225. https://www.aeaweb.org/articles?id=10.1257/aer.91.2. 219
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Supporting SS2: Cost-push inflation can be caused by higher labour SS2: The cost of production might rise in response to an Sentences & expenses, such as when production workers are required to increase in government purchasing. Inflation driven by Supporting receive mandatory wage increases because of a rise in the demand will result from increased government spending. This Details 2: minimum wage per worker. Consequently, businesses face is so because a portion of aggregate demand (AD) is made up pressure to increase their prices to safeguard their profit of government spending. A rise in government spending will margins. raise the amount of AD in the economy. This causes the aggregate supply (AS) curve to extend, the price level to rise, SD2: The following competitiveness amongst business and real GDP to rise. owners for fully engaged labour pushes nominal pay higher until real wages return to their starting point. In the goods SD2: “The government expenditure indicates a positive and market, the rise in real wages creates unexpected pressure. significant relationship with inflation (CPI). It shows that a rise Prices rise once more. The only way to stop an inflation spiral in one percent of government expenditures will raise the that results from the wage-lag mechanism's continued Consumer Price Index by 0.533762.” This finding is in line operation is to lower aggregate demand, which can be done with earlier studies' conclusions that inflation is indeed by raising taxes or cutting government expenditure caused by an increase in government spending. There's a (Kibritçioğlu, 2002). good chance that rising government spending will raise aggregate demand (AD). As a result, inflation may arise, and the growth rate may accelerate in the near run (Yusof et al., 2021).
References- Kibritçioğlu, A. (2002). “Causes of Inflation in Turkey: A Yusof, N., Nin, L. F., Kamal, H. K. M., Taslim, J. R. A., & APA style: (for Literature Survey with Special Reference to Zainoddin, A. I. (2021). Factors that Influence the supporting Theories of Inflation”. Forthcoming in: Inflation and Inflation Rate in Malaysia. International Journal of detail 2) Disinflation in Turkey, 43-76. Academic Research in Business and Social Sciences, https://econwpa.ub.uni-muenchen.de/econ- 11(9),626–637. wp/mac/papers/0107/0107002.pdf http://dx.doi.org/10.6007/IJARBSS/v11-i9/10838
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Concluding Hence, the cause of inflation in the economy is cost-push Consequently, demand-pull inflation is another cause of Sentences: inflation. inflation.
