Inflation and the price of oil are frequently viewed as being linked in a cause-and-effect relationship. As oil prices go up or down, inflation tends to pursue the same direction. The reason being that oil is the critical input in the economy - it is utilized in essential activities such as heating homes and fueling transportation - and if input cost upsurges, it results in a rise of end products. For instance, if the prices of oil rise, then it will cost more to make plastic bags, and the producers of the plastic bags will pay the increased cost of production to the customers, which increases the prices and hence, inflation.
With an increase in inflation, there is a decline in the buying power of money, which minimizes consumption, and thus Gross Domestic Product (GDP) lessens. High-rise makes investments unpleasant because it establishes doubt for the prospect, and it can also affect the balance of payments because exports become more costly, consequently, GDP is negatively associated with inflation.
A clear example is below case is presented in the interview below that interviewed by a grandparent when I had visited him in one of the holidays. On holidays, I booked a flight to Ontario to visit my grandparents. I arrived at my grandparent's place at around dinnertime only to find my grandmother being a little disappointed. I then decided to ask her what had happened, and she narrated her ordeal at the grocery shop. She went to the shop to purchase groceries to make dinner that evening; she had 100 Canadian dollars as her budget for all the items needed. To her dismay, she was able to buy only half of her list because the amount she had was not enough. In her own words, she said:" Buying groceries in this country is like buying a car." This statement got me thinking of how much the economy has changed over the years.
In grocery stores, CPI went up 0.2 percent from August to September and is 0.6 percent higher than last September. Food retailers have experienced a significant increase in the previous three years. Still, this rate is the highest in a period Groceries prices in Canada are estimated to rise 1.5% to 3.5% in 2019, following the previous annual publication of Canada's Food Price Report, groceries were to witness the maximum rise 4% to 6%, seconded by foodstuff bought at hotels at 2% to 4%.( CANADA'S FOOD PRICE REPORT, 2019). Fruit produce prices are said to rise from 1% and 3%, whereas dairy products were to increase to 2%. Although a drop in meat prices, Charlebois indicates beef, prices in various areas went up five years ago. Most individuals begun to explore other options like being vegetarians because of the high costs of meat, seafood price inflation was caused by type and availability in the market.
This interviewed backed up with an article by the Name. Does life cost more than before? Written by Ducas, the report says that" Prices keep rising!" often lament consumers. If we feel stuck financially, is it really, because pricing is raising more for goods, and our needs and desires have exploded when compared to those of our parents? In the past decades, the prices of gasoline were a bit lower than in the present that is why people hardly raise complain regarding prices of goods and services. Nonetheless, in 2019, the annual inflation rate is at 1.9%, which is below market anticipations of 2.1%. 1.9% inflation rate has caused the price of gasoline to rise, causing GDP to lower.
The articles offer an opposing explanation claim that people need not complain about the rise in the cost of living since income paid to Canadian citizens has also increased. Besides, expenses on food only take a smaller portion of the household's expenditures. The higher loss of life, according to the author, is attributed to the increased standard of living. Ducas (2016) gave an example, as per the research that was conducted in Quebec standard of living upsurged by 51% when compared with the living standard of people of Quebec in the 1990s.
This suggests that the present generation economy system is based on consumption, and people place their measure of happiness of material things, which is the critical source of dissatisfaction in life because of the need to grow quicker than our financial resources.
CANADA'S FOOD PRICE REPORT 2019. (n.d.). Retrieved from DALHOUSIE UNIVERSITY : https://www.dal.ca/faculty/management/news-events/canada-s-food-price-report.html
Ducas, I. (2016, 20, April ). Does life cost more than before? Retrieved from LA Preesureca: https://www.lapresse.ca/affaires/finances-personnelles/201604/20/01-4973184-la-vie-coute-t-elle-plus-cher-quavant.php
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Effect on Inflation on Food Prices on Canada, Free Essay Sample. (2022, Feb 22). Retrieved from https://speedypaper.com/essays/effect-on-inflation-on-food-prices-on-canada
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