Inflation is the main problem of current era. Inflation is exploiting the whole economy and is incredibly increasing day by day. In this course I have deeply describe the Inflation, it's causes and the methods to avoid over growing inflation.
Macroeconomics exam study case questions and answers
Macroeconomics by Michael Parkin 10th edition
Macroeconomics by Michael Parkin 10th edition
All for this textbook (8)
Written for
Secondary school
Economics
2
All documents for this subject (489)
Seller
Follow
aahmarali143
Content preview
INFLATION
Inflation is an economic phenomenon characterized by a general and sustained increase
in the overall price level of goods and services in an economy over a period of time,
resulting in a decrease in the purchasing power of a currency. In simpler terms, it means
that as inflation occurs, each unit of currency buys fewer goods and services.
CAUSES OF INFLATION
The causes of inflation can be broadly categorized into two main types:
Demand-Pull Inflation:
Demand-pull inflation occurs when the overall demand for goods and services in an
economy exceeds its supply. This can happen due to various factors:
Increased consumer spending: When consumers and households have more
disposable income, they tend to buy more, driving up demand.
Investment by businesses: Increased business investments and expansion can boost
demand for resources, increasing prices.
Government spending: If the government increases its spending on public projects,
it can stimulate demand and lead to inflation.
Exports: Strong demand for a country's exports can also lead to increased demand for
its currency, raising domestic prices.
Cost-Push Inflation:
Cost-push inflation is driven by rising production costs, which are then passed on to
consumers in the form of higher prices. Some key factors contributing to cost-push
inflation include:
Rising wages: When workers demand higher wages, businesses may increase prices to
cover increased labor costs.
Increase in the cost of raw materials: Prices of key inputs, such as oil, metals, and
agricultural products, can rise due to supply disruptions or geopolitical factors.
Supply chain disruptions: Events like natural disasters, conflicts, or pandemics can
disrupt supply chains, leading to shortages and higher production costs.
Taxes and regulations: Government policies like increased taxes or stricter
regulations can raise costs for businesses, which may pass them on to consumers.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller aahmarali143. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R196,81. You're not tied to anything after your purchase.
