What is Inflation-Explained

in this post explained what is inflation, and how its work, and what you understand by inflation deeply explained... Read this article to know what is inflation 

𝗪𝗵𝗮𝘁 𝗱𝗼 𝘆𝗼𝘂 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝗯𝘆 I𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻?

 It is a sustained increase in the price level of goods and services in an economy over a period of time. It reflects A reduction in the purchasing power per unit of money.

𝐅𝐨𝐫 𝐞𝐱𝐚𝐦𝐩𝐥𝐞

1- A production is of 50 rupees now and later one month I have to pay 70 rupees this increase in price level we call inflation.

2.- Samosa was worth rupees 0.10 and 10 paise but now it cost 10 rupees so money purchasing power has decreased.

𝗧𝘆𝗽𝗲𝘀 𝗼𝗳 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻?

1. 𝐃𝐞𝐦𝐚𝐧𝐝 𝐩𝐮𝐥𝐥 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧

-- When demand is greater than aggregate supply so price increases this is called inflation.

𝐅𝐨𝐫 𝐞𝐱𝐚𝐦𝐩𝐥𝐞

They have one TV and there are five customers supply will be a sale to person money increase. Demand increase and supply decrease production of prices increase.

Crop destroys the price of crop increase which causes inflation

𝟐. 𝐂𝐨𝐬𝐭 𝐩𝐮𝐥𝐥 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧

-- When the factor of production will be expensive then the production of the product will be expensive pledge he will be selling it more price higher price label go UP due to an increase of the cost of raw material nature describes can make some material increase price increase.

-- Another way price rise if wages also rise mini-companies will increase the price of production this is called wage pull inflation.

𝟑. 𝐂𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧

-- Situation in which more money becomes available without an increase in production and services causing the price to rise.

𝟒. 𝐂𝐫𝐞𝐝𝐢𝐭 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧

-- Bank gives a lot of loans to people.

 for example, scooter bike finance so much money supply increased a lot in economy demand and of economy full but productions same that's called credit inflation.

𝗘𝗙𝗙𝗘𝗖𝗧 𝗢𝗙 𝗜𝗡𝗙𝗟𝗔𝗧𝗜𝗢𝗡

In a period mild inflation job seeker can be benefited.

If you have borrowed money from lender inflation that can be convenient for you with the currency developed what you borrowed a year ago is now equal to a lower amount of money.

And wealth management-labor inflation is a distraction for all people lost faith in the currency businessman suffer a good becomes too expensive for most people.

 lower saving.

      --In the market prices increase and demand is rise then the market is going to inflation and this time no one can save money on banks and other sectors in this cause called lower saving.

 Less investment.

     Increases of rice and increases in demand in the market no can have money to invest and purchase something purchasing power of goods on people is very lower and very lower and less investment power.

𝗦𝗧𝗘𝗣𝗦 𝗧𝗢 𝗖𝗢𝗡𝗧𝗥𝗢𝗟 𝗜𝗡𝗙𝗟𝗔𝗧𝗜𝗢𝗡

Central Bank throughout the world uses monetary policy to avoid inflation and deflation.

The government can increase tax and interest rate of loan people will not take more loan and the money supply reduce the control inflation.

𝗠𝗘𝗔𝗦𝗨𝗥𝗘𝗠𝗘𝗡𝗧 𝗢𝗙 𝗜𝗡𝗙𝗟𝗔𝗧𝗜𝗢𝗡

𝐓𝐡𝐞 𝐔𝐒 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐡𝐚𝐬 𝐜𝐨𝐮𝐩𝐥𝐞 𝐨𝐟 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭 𝐦𝐞𝐭𝐡𝐨𝐝𝐬.

Consumer price index (CPI)

using this the US bureau of labor statistics measure the retail price of goods and services in the US putting more than 80000 purchasing items from hundreds of different categories into the market basket then grouping them together.

This index is measure every month and every month of BLS published the price.

 Personal consumption expenditure

Some analytics referred to use this personal consumption expenditure method over the consumption expenditure index when measuring the inflation rate.

The personal consumption expenditure price index measures inflation in which is inflation of goods and services including food gas and oil.

𝐌𝐞𝐚𝐬𝐮𝐫𝐞 𝐛𝐲 𝐮𝐬 𝐛𝐮𝐫𝐞𝐚𝐮 𝐨𝐟 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐚𝐧𝐚𝐥𝐲𝐬𝐢𝐬.

It is the index the federal reserve used as a primary source for the inflation rate.

Zimbabwe into hundreds and events serious hyper hyperinflation many economists point to the country financing of the second Congo war by printing movement money as a measure causes of this.

It was so bad that the currency becomes on slave visible eventually demonization occurs and their moves to foreign fiat currency

Hungry head hyperinflation in 1946 after World war II at this time inflation rate of pengo was well over two hundred percent a day price double every 15 hours should be abandoned the currency start new rate...


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