Thursday, January 24, 2008

Unit 3: Economic growth in China

The BBC reports that China's growth reaches a 13-year high: The Chinese economy has expanded by 11.4% over the past year, reaching its fastest growth rate in 13 years, officials have announced.

a) Using an AD/AS diagram, explain the effect on the Chinese economy of this economic growth
b) From the article it would appear that Chinese officials are woried about rising inflation. Explain why this might be occuring and what action the Chinese govt could take to reduce the inflation problem

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