Cambridge International as and a level Economics Ebook

[12]
Source: 
Cambridge International AS and A Level Economics 9708 
Paper 23 Q4 October/November 2012. 
3
The price of rice in international trade
Between January 2002 and July 2008 the world 
price of rice, a staple food for many people in 
developing countries, rose by slightly over 300%. As 
shown in 
the price of rice changed very 
significantly in the six months to July 2008 and was 
influenced by the actions of diff erent governments.
Figure 4.26 
Actions of diff erent governments and the 
world price of rice
1000
800
600
US $ per metric tonne
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
400
India restricts
rice exports
Vietnam limits
rice exports
Japan announces
release of rice
stocks
200
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Chapter 5:
Government macro intervention
AS Level
Learning objectives
On completion of this chapter you should know:
■
the aims of macroeconomic policy
■
what is meant by fiscal, monetary and supply side policies
■
the aims and instruments of each policy
■
how fiscal, monetary and supply side policies may correct 
a balance of payments disequilibrium
■
the factors that influence the eff ectiveness of fiscal, 
monetary and supply side policies to correct a balance of 
payments disequilibrium
■
how fiscal, monetary and supply side policies may correct 
inflation and deflation
■
the factors that influence the eff ectiveness of fiscal, 
monetary and supply side policies to correct inflation and 
deflation.
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G
G
Tax revenue
Government spending
Gover
nment spending and taxation
Real GDP
0
Y
T
T