The paper "Relationship between GDP and Inflation" is a wonderful example of a report on macro and microeconomics. This section explains how each variable will be used in the analysis as well as its importance. Where needed, the reasons for using a particular value will be described. At the end of the section, the sources of data will be given. Development and growth is the main aim of many countries, Oman is not excluded from this policy of industrialization and development, the core principle of most macroeconomic policies is to come up with and develop high economic growth with if possible no inflation at all cost.
Many scholars have continuously debated over the same issue of any existence between growth and inflation. Both classical and neoclassical economists agree that a low inflation rate in an economy is positively related to economic growth. (Bradley, 2007) In this study, we want to find out the relationship between inflation and the growth in Oman country. The variable to be study include Gross domestic product at current prices Gross domestic product PPP Gross domestic per capita PPP Real Gross domestic product growth Current account balance Current account balance Gross domestic product Goods and services expenditure Gross domestic product Inflation rate Gross domestic product at current prices This GDP is also called nominal GDP and is always calculated at the current market prices.
While calculating nominal GDP changes in prices which has taken place due to inflations or deflation are factored in that current year. Inflation can be said to be the general increase of price level of goods within a given economy while deflation can be said to be the general fall in prices of goods within the economy. This GDP is very important in knowing the currency stability within the economy and also the economic growth of a country since it factor in the changes in price within the year.
(Krugman, 1987) 1.1.2Gross domestic product purchasing power parity GDP purchasing power parity is one of the economic theories used to calculate and determine the general currency value. It is used to estimate the amount which needs to be adjusted to a given exchange rate among countries for them to be equal or at par with each other. If you take two countries like the United States and England, one needs to know how much US dollars is needed to purchase the same goods at 10 England pounds and that will give as the purchasing power (Krugman, 1987).
Bradley, T. (2007) Essential Statistics for Economics, Business and Management, Great Britain: John Wiley and Sons
Krugman, P. R. (1987) ‘Is Free Trade Passed?’, Economic Perspective, 1:131-144
World Bank of Oman. (2007), Economic Data. Available from: www. Worldbank.co.ke