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This article talks about how South Korea's inflation is at its lowest in 12 years at 1.2 per cent. This has both positive and negative effects. It is positive because price level is only slightly increasing, which is good for consumers withing South Korea. However it also has many negative effects. Because inflation is so low employment and real GDP will only be slightly increasing, these are elements that are good for the economy when they increase. One of the main reasons why the inflation is so low is because exports, a key section of the country's economy, have decreased. If exports continue to decrease then this could result in a decrease of GDP in the country which is not good for people living in the country and the country's economy. However, the article says that it is unlikely that South Korea will experience deflation and that this is likely the trough for inflation, meaning inflation is due to increase.

This is a classic example of cost-push inflation. The supply costs are increasing (in this case the workers wages) which means that SRAS shifts to the left, as less is being is being supplied. Firms hire less workers or produce less because of the high costs. As a result, price levels rise, unemployment levels rise and the real gross domestic product falls. This is also obvious because, if workers go on strike as mentioned in the article, then they are producing less goods, meaning that GDP obviously decreases. This could turn into an inflationary spiral. This spiral is because, when wages are increased for purposes such as to pay or rent or everyday goods, the firms also demand higher prices, which causes those who buy from them to charge more too. This is what causes the cycle to begin. Otherwise it could get to a point where currency becomes worthless.

The article discusses that the US may face a fiscal cliff in order to reduce the large deficit that has accumulated in the past. A fiscal policy stands for a series of major tax increases and government spending cuts if Congress does not act. The article discusses that through lower government spending and higher taxes it is expected that $600 billion can be extracted from the economy to decrease the debt. However economists think that every dollar of deficit reduction will subtract the same or a greater amount from economic growth. In theoretical terms this would make sense. If government spending decrease this reduces aggregate demand in the economy and by that will cause a decrease in real GDP. Households will cut back on purchases and especially households that are dependent on government support through unemployment benefits will suffer from the policy. Although this will decrease the deficit of the US it may be that it distracts the fragile recovering economy. 

Ireland's high current unemployment rate of 14.9 percent is a result from its economic situation : Ireland is in a recession. The article clearly stipulates this, there is a 'recession in the real domestic economy'. The recession arose from the housing bubble : mortgages were cheap, people overborrowed and then the high housing prices fell so that people were less wealthy and no longer able to pay their mortgages. Wealth is a determinant of AD. It is the added value of all assets or stocks. If wealth or perceived wealth increases, then so will a household's consumption of goods, thereby shifting demand, as the household feels 'wealthier' or able to purchase more. The reverse is also the case, when wealth declines, demand declines, such as in Ireland. The Irish were much less willing to consume goods, as they believed they were less wealthy or had less money( which they eventually did , upon having to pay mortgages; debt), and so consumption decreased, which thus shifted aggregate demand into a demand slide recession. This is a situation where prices in a nation inflate and output decreases, due to the lesser demand. If less is being produced, less factors of production are required. Thus labor, a major factor of production is no longer required in the economy, which gives firms the incentive to lay off many of their workers. This is the unemployment Ireland is experiencing. It is interesting that the article also depicts the  'austerity drive'  that the Irish government resulted to in the recession.  As it correctly suggests, this is 'self defeating', as during a demand slide recession the Keynesian policy follows that the government should not save its funding, but rather spend. In a time of recession, the government should spend,  so as to decrease unemployment stimulate the economy. If the government spends, this will have a multiplier effect through the economy, as it provides income to households ( by spending, the government employs labor), where househo

This article talks about the rise in the unemployment rate in France. Unemployment occurs when someone of working age who is willing and able to work and is looking for work is unable to find a job. The unemployment rate is that percentage of the total labor force in a country that is in this situation. This article states that unemployment in France has reached a 13-year high at 10.2%. There have been 3 consecutive quarters of zero growth. Youth unemployment has also risen with the unemployment rate amongst 15 to 24 year-olds now 22.7%. One of the possible solutions for the situation is to wait until the market fixes itself. Pressure on prices of factors of production is decreased due to the smaller number of workers present. Eventually, firms should start buying more factors of production, increasing the country's Real GDP. Since output will then have been increased, more workers will be needed and employment should rise. However, several large French companies have recently announced plans to lay off more workers. This shows that the natural process of getting output back to where it was before the recession is not occurring. France's government has therefore offered a solution: launching a scheme to create 150,000 state-subsidized jobs for young people.