Question

Based on the information in the Press Release, in the thinking of the MPC did the risk to growth outweighed the risk to inflation or vice versa? Refer to specific points from the press release to back up your argument.

Answer 1

Press Release:- A Press Release is an official statement delivered to members of the news media. It is a traditional way to convey official news, including a headline, introduction, body and other information.

MPC (Marginal Propensity to Consume):- In economics, the MPC is defined as the quantity of an aggregate increase in pay that a consumer spends on the consumption of goods and services which is avoided as ‘Savings’. MPC is a main component of Keynesian theory to calculate the change in consumption divided by the change in income.

Diagram – 1

MPC create risk to growth outweighed the risk to inflation.

1. Press Releases contain new information on daily base incidents. The news media get more press release, the MPC is increased. Because it is the main factor or thing for media houses to develope their network, but there is the negative impact. Also MPC may create risk to growth outweighed the risk to inflation.

2. Negative MPC multiplier effect happens when the initial withdrawal of spending from the economy. Something happens when new press releases are not given to media houses.

3. When media house gets less press releases.

4. When media house decreases the demand for press releases.