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  • Devaluation of Currency: Increasse in Interest Rate Decrease in Investment Business Slow Down Lower Tax Collections

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    varun kumar Verma
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    The document discusses various factors that can contribute to inflation in a country, such as increases in oil prices, currency devaluation, and higher wages. It notes that rising inflation can lead central banks to raise interest rates, which can then slow business activity and investment, lower tax revenue, and potentially increase fiscal deficits if not addressed. High inflation may also cause currency devaluation and reductions in bond prices, sovereign credit ratings, and foreign investment levels.

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    The document discusses various factors that can contribute to inflation in a country, such as increases in oil prices, currency devaluation, and higher wages. It notes that rising inflation can lead central banks to raise interest rates, which can then slow business activity and investment, lower tax revenue, and potentially increase fiscal deficits if not addressed. High inflation may also cause currency devaluation and reductions in bond prices, sovereign credit ratings, and foreign investment levels.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    3 views1 page

    Devaluation of Currency: Increasse in Interest Rate Decrease in Investment Business Slow Down Lower Tax Collections

    Uploaded by

    varun kumar Verma
    The document discusses various factors that can contribute to inflation in a country, such as increases in oil prices, currency devaluation, and higher wages. It notes that rising inflation can lead central banks to raise interest rates, which can then slow business activity and investment, lower tax revenue, and potentially increase fiscal deficits if not addressed. High inflation may also cause currency devaluation and reductions in bond prices, sovereign credit ratings, and foreign investment levels.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    tariffs

    Devaluation
    of currency
    WPI CPI
    oil
    prices
    INFLATION

    INCREASSE IN
    INTEREST RATE

    PURCHASING DECREASE IN
    POWER OF INVESTMENT
    BUSINESS SLOW
    SHRINKING MONEY? DOWN
    PROFIT LOWER TAX
    COST INCREASE MARGINS! COLLECTIONS
    (WAGES) DEPENDING
    UPON MARKET
    STRUCTURE
    FISCAL DEFICT!

    increasing
    interest
    rate

    decrease in
    bond yield

    decrease in
    sovereign
    ratings

    decrease in
    investor
    confidence

    FIIs
    withdraw

    sell rupeee
    buy dollar devalaution of currency

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