source: http://www.worldnewsco.com/3150/food-prices-increase-44-million-people-risk-poverty/
Summary
Recent studies has shown that world food prices increase has caused 44 million people in developing countries at the brink of poverty, or already experiencing poverty. The result of food price increases has caused an reduction in nutritional intakes because poor people will be forced to consume foods that are cheaper and low nutrients. The price of corn is the food price that experienced the highest increase. Cornflour or cornstarch rose 73% and this is crucial for poor countries.
Connection
This is related to the topic of aggregate demand in Chapter 6 surrounding the factor of price. Price and price changes are likely to influence the level of consumer spending. Households may cut back in response to price increase, but in some cases they may increase spending in case of even higher price inflation. This particular event has caused many families to take a toll in their lives.
Reflection
I feel that action should be taken to cure this problem, whether it be avoid food export restrictions or increasing the investment in agriculture. But people going into poverty and at the risk of death is very scary. This would cause many families to become unhealthy due to not enough nutrition taken in daily. If people are running out of money and becoming poor due to food, then chances are no one is going to make any purchases of anything else. Therefore makes a down turn for the economy.
I totally agree with what you have said about food prices affecting the economy as a whole. This is the case because with little spending money, people will most likely use it on necessities such as food and since the price of food has gone up 44%, there will be less money on goods. This will ultimately be a down turn for the economy.
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