Price+rises+in+China,+inflated+fears+-+Jungsoo

__Title of the extract (article)__: Inflated fears: Price rises in China

__Source of the extract:__ http://www.economist.com/node/17851541

__Date of the extract:__ Jan 9, 2011

__Brief explanation of the article:__ The article is about dramatic price rise in China. In the year to November consumer prices rose by 5.1%, showing a great sign of greater inflation. The cause of China's inflation is the result of higher food prices which occurred due to disruptions to food supplies. However, the economists think that food inflation only reflects stronger demand rather than weaker supply because as GPA of China increases, people start to buy more food. The article also talks about sharp rise in interest rates, too. The People's Bank of China (PBOC) raised it to prevent people from borrowing too much money, but it turns out to be futile because government can tame its headstrong banking system and quell inflationary expectations. Finally, the writer comments that inflation in China may help the other countries because Chinese goods become less competitive aboard and China's trade surplus should shrink, contributing to growth elsewhere.

__List and define any and all vocabulary terms:__
 * Macroeconomics: It is concerned with the economy as a whole. It is thus concerned with aggregate demand and aggregate supply. It considers inflation unemployment and the distribution of income in the whole economy.
 * Market: It is a place or process whereby buyers (customers) and sellers (businesses) meet to trade.
 * Stronger demand (higher demand): the amount of a good or service that consumers are willing and able to buy at a given price is increased.
 * Weaker supply (less supply): the amount of a good or service that people or businesses are willing and able to provide at a given price is increased.
 * Rate of inflation: The percentage increase in the level of prices over a 12-moth period.
 * GDP: Gross Domestic Product (amounts of goods and services produced in a year)
 * Surplus: When quantity supplied is greater than quantity demanded

__Create an appropriate graph which is related to the article:__

__Evaluation:__ The article shows how rapid growth of China's economy has led to some side effects. I think the governments should raise the interest rate by revising its original monetary policy so inflation can be alleviated. I know that this will lead to slower growth of China's economy, but it is already developing too fast, 10% every year. It is necessary for the governments to put some breaks on its pathway to prevent two double-digit inflation from occurring again. Moreover, I think it is also important for Chinese governments to make people realize how dangerous it is to let economy grow by its own because most of people may think that 10% growth only means positive outcome. On the surface, it may look that way, but in fact, rapid growth can lead to several economic problems. Thus, by informing people the possible serious consequences, people can be realized and prevent those more effectively.