Assignment of-2209

Fin :
Macroeconomics

Department of
Finance,

Submitted to
Saud Ahmed
Course Instructor/ Lecturer,

Faculty
Business
Studies

of

Jagannath
University,
Dhaka

Submitted by

Sultan Ahmed Khan

Representative
of the group
Epimetheus

rd

BBA 3 Batch
Department of
Finance,
Faculty
Business
Studies

of

Jagannath University, Dhaka.

Group Name: Epimetheus

Group No:
Name of the members of the group:

Serial No:

Name of the members of the group

Roll Number

01

Sultan Ahmed Khan

091597

02

Md. Mynul Islam

091633

03

Mamunur Rashid

07882747

04

Md. Mofazzal Hossen

091615

05

Sharjil Ahmed

091623

06

Md. Anik Mahmud

091636

07

Protiva Talukder

091602

08

Md. Mehedi Hasan

091590

09

Mohammad Didarul Islam Khan

091613

Group Representative: Sultan Ahmed Khan.

Group Coordinator

: Md. Mynul Islam.

Contact

: epimetheus.jnu@gmail.com

May 02, 2011

The Course Instructor,

Saud Ahmed,
Lecturer,
Department of Finance,
Jagannath University, Dhaka.
Sub: Thanks giving letter to the respective faculty member.

Sir,
We are the student of Department of Finance (3 rd batch) of Jagannath University, Dhaka & also from
the group named Epimetheus. We are very much enthusiastic about our presentation. We are
really happy to have such a presentation of challenging and interesting like this presentation & also

thanks to you for making us worthy for corporate. Our presentation topic is A case study of
Bangladesh- Inflation, Unemployment & Growth trend. We have learned many things from
this topic which will help us in future to conduct as an analyst of economics. There were some
obstacles we have faced at the time of collecting data about our topic. But we have overcome all the
obstacles by the endeavor effort by each member of our group and tried our best to give an overview
of our topic.
We the group Epimetheus tried our best to make this presentation attractive, impeccable,
interesting, informative and enjoyable by the help of electronic and print media in association with our
honorable teacher, mentor, counselor, instructor and advocate Saud Ahmed. We are really grateful to
him. We had limitations at the time preparing presentation. So mistakes may occur in our
demonstration of our presentation. We hope that, you will exempt our mistakes .

Thanking in anticipation,
Yours Fidel,

Sultan Ahmed Khan

Group Representative,

Group-Epimetheus
BBA 3rd Batch

Department of Finance
Jagannath University,Dhaka.

First of all we would like to thank the Almighty for giving us the strength, and the aptitude to
complete this report within due time. We are deeply indebted to our course teacher, mentor,
and counselor, Saud Ahmed for assigning us such an interesting topic named A cause
study of Bangladesh- Inflation, Unemployment and Growth Trend. We also express the
depth of my appreciation to our honorable course teacher for his suggestion and guidelines,
which helped us in completing this report.

Inflation, unemployment and growth trend are the major factor of macro economics. Losing
the purchasing power and increasing the cost of production indicates the high rate of
inflation. Unemployment occurs when people are without jobs and they have actively looked
for work within the past four weeks. The trend of the growth of the real GDP is called Growth
Trend. Economic growth is primarily driven by improvements in productivity. However,
inflation & growth rate have both positive & negative relationship depending on situation.
Moreover, inflation and unemployment have a negative relationship. All the factors are
interrelated and at the time of analyzing one must consider each and every factor with equal
consideration. If we analyze the economical condition of our country it is clear that inflation
is higher in recent years comparing with past decade. Growth trend is upward till the inflation
rate is 7 percent. After that the trend gets downward. At the same time unemployment rate is
inverse all the time with inflation rate maintaining contractionary & expansionary policy.
Inflation fluctuates all the time because of the fluctuation of the money supply. But in recent
years, we came to know that international affairs are influencing to increase the inflation rate.
Consistent budget deficit and exchange rate deteriorate the economic growth which directly
relates with unemployment & inflation.

NAME

Page no
Executive Summary

Introduction
Chapter- 01

1.1 Introduction

01

1.2 Rational of the study

01

1.3 Objective of the study

02

1.4 Scope of the study

02

1.5 Methodology of the study

02

1.6 Limitations of the study

02

Body of the term paper

Chapter- 02

Inflation

03

Effect on the economy

03

Causes behind inflation

05

Historical trend analysis

07

Limitation of economic system & needed

step

10

Unemployment rate

11

Effect of unemployment

12

Causes behind unemployment

14

Aftermath of unemployment

17

Needed steps

18

Growth Trend

19

Chapter-03

Relationship with inflation

22

Historical trend & needed step

23

Findings of the study

24

Conclusion

25

Bibliography

25

Contents of Tables, Graphs

NAME

Page No

Trend of inflation

07

Trend of unemployment

16

Trend of growth trend

21

Chapter- 01
Introduction
Too much money in circulation causes the money to lose value-this is the true meaning of
inflation.

Unemployment occurs when people are without jobs and they have actively looked for work
within the past four weeks-ILO.
The trend of the growth of the real GDP is called Growth Trend. Economic growth is
primarily driven by improvements in productivity.
In this report we tried to show that how inflation, unemployment, growth trend are related
each other & how important it is for economy & how it works in our country.

Rationale of the study

The case study is assigned by our course teacher Saud Ahmed as a part of our Macro
Economics course. The topic of our case study is A case Study of Bangladesh: Inflation,
Unemployment, and Growth Trend. By conducting this study we can enhance our
knowledge and skill to apply various research methods in professional life on higher
educational life. The report has given us a chance to raise our quality in developing research
instrument and its applications. By doing so, we can boost our acceptability in job market and
develop our real life knowledge.

Objective of the Case Study

Primary objective
The main objective of the study is to know how the factors of macroeconomics work in our
country.

Secondary objective:
The case study has the following objectives:
To know about Inflation, unemployment, Growth Trend.
How inflation, Unemployment and Growth Trend fluctuate.
Relationship among the inflation, unemployment and growth trend.
Causes behind the inflation, unemployment and growth trend.

Scope
There were huge scopes to work in the area of this Case Study. Considering the dead line, and
exposure of the paper has been wide-ranging. The study A case Study of Bangladesh:
Inflation, Unemployment, and Growth Trend has covered overall scenario of
macroeconomics situation of Bangladesh. It has measured the living standard of mass people.

We have a chance to work on the economic variable used in modern economic world. By
doing the assignment, we are able to know that the importance of inflation, unemployment &
growth trend to assess how the people of the country living in. In the case study we have
showed how the above variables are inter related on each other.

Methodology
We have used the concept of the course, information of the case study.
Sources of Data
Here the secondary sources of information were used. The secondary sources are:
Books.
Website.

Limitations
While conducting the report on A case Study of Bangladesh: Inflation, Unemployment,
and Growth Trend, some limitations were yet present there:
Because of time shortage many related area cant be focused in depth.
Website in different organization of Bangladesh contains poor information.
Recent data and information on different activities was unavailable.

Chapter-2
Inflation

Definition
Too much money in circulation causes the money to lose value-this is the true meaning of
inflation. The popular opinion about the costs of inflation is that inflation makes everyone
worse off by reducing the purchasing power of incomes, eroding living standards and adding,
in many ways, to lifes uncertainties.
In economics, inflation is a rise in the general level of prices of goods and services in an
economy over a period of time. Inflation refers to a rise in prices that causes the purchasing
power of a nation to fall. Inflation is a normal economic development as long as the annual
percentage remains low; once the percentage rises over a pre-determined level, it is
considered an inflation crisis.
In another word Inflation means that your money wont buy as much today as you could
yesterday.

Definition of Inflation rate (consumer prices)

This entry furnishes the annual percent change in consumer prices compared with the
previous year's consumer prices.
The inflation rate is the percentage rate of change of a price index over time.

Effect on the economy

Effect of Inflation

General

Negative

Positive

General Effect
An increase in the general level of prices implies a decrease in the purchasing power of the
currency. That is, when the general level of prices rises, each monetary unit buys fewer goods

and services. Increases in the price level (inflation) erode the real value of money (the
functional currency) and other items with an underlying monetary nature (e.g. loans and
bonds). For example if one takes a loan where the stated interest rate is 6% and the inflation
rate is at 3%, the real interest rate that one are paying for the loan is 3%. It would also hold
true that if one had a loan at a fixed interest rate of 6% and the inflation rate jumped to 20%
one would have a real interest rate of -14%.

Negative Effect
High or unpredictable inflation rates are regarded as harmful to an overall economy. They add
inefficiencies in the market, and make it difficult for companies to budget or plan longterm.
Inflation can act as a drag on productivity as companies are forced to shift resources away
from products and services in order to focus on profit and losses from currency inflation.
Uncertainty about the future purchasing power of money discourages investment and saving
and inflation can impose hidden tax increases.
In case of international trade, Higher inflation in one economy than another will cause the
first economy's exports to become more expensive and affect the balance of trade

Positive Effect
Positive effects include ensuring central banks can adjust nominal interest rates (intended to
mitigate recessions), and encouraging investment in non-monetary capital projects. It puts
impact on Labor-market adjustments, Room to maneuver, Mundell-Tobin effect, Instability
with Deflation etc.

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