The Impact of Inflation on Business and Trade : a case study of Ghana and Canada

Abstract: The thesis looks at the relationship between inflation, interest rate, exchange rate and GDP for a developed country (Canada) and a developing country (Ghana). Through a detailed literature search looking at the economies of Ghana and Canada as well as statistical analysis using least squares and regression models the following questions were addressed: 1) What is the impact of inflation on businesses and trade? 2) Most businesses depend on loans to run their business operations. What is the correlation between inflation and interest rate both in Ghana and Canada? 3) How is inflation affecting the exchange rate development of import and export? What is the effect on businesses that depend mostly on imported raw material for production? 4) How is monetary policy used in Canada to control inflation and how does this compare to the policy being used in Ghana?