what is inflation?

Answer 1

Well..........Inflation is the persistent rise in the general price level as measured against a standard level of purchasing power. There are many varying measures of inflation in use because different prices affect different people. The most widely known indices are the Consumer Price Index (CPI) which measures the change in nominal consumer prices and the GDP deflator which measures inflation in new products and services created.

Mainstream economists' views of the causes of inflation can be broadly divided into two camps: the "monetarists" who believe that monetary effects dominate all others in setting the rate of inflation, and the "Keynesians" who believe that the interaction of money, interest and output dominate over other effects. Keynesians also tend to add a capital goods (or asset) price inflation to the standard measure of consumption goods inflation. Other theories, such as those of the Austrian school of economics, believe that inflation is caused by an increase in the supply of money by central banking authorities.

Related concepts include: deflation, a general falling level of prices; disinflation, the reduction of the rate of inflation; hyper-inflation, an out-of-control inflationary spiral; stagflation, a combination of inflation and rising unemployment; and reflation, which is an attempt to raise prices to counteract deflationary pressures.

In classical political economy, “inflation” means increasing the money supply, while “deflation” means decreasing it. The purpose of this increase in money supply is to accommodate any increase in real GDP. Some economists in a few schools of economic thought, generally described as libertarian, classical liberal, or ultra-conservative, still retain this usage. In mainstream economic terms these would be referred to as expansionary and contractionary monetary policies.

Cheers *Nike*

Answer 2

First we need to understand inflation. There are many different definitions and theories of thoughts from the world of economists on what inflation means. However the man on the street understands that basically there is too much currency floating around in the system causing a devaluation of the dollar and leading to increased prices. Unfortunately unions often times fight for increased wages because of rising prices however this only further increases inflation because prices continue to rise. The most significant thing the government can do to decrease inflation is to reduce the availability of money in the system. The approach will include: Price regulation - regulating prices so that they fall within a band where the business owners may still make a profit but yet not take advantage of the situation Regulations on commercial financial lending institutions - Increase the difficulty for obtaining a loan by increasing the interest rates and insisting on larger securities for loans. Making it harder to get a loan helps to curb the flow of cash in the system Incentives for saving - Monies in fixed deposits are monies that no longer freely flow in the system and will prove beneficial to the end users especially once the economy stabilizes once more. These are some of the ways the government may use to bring back the economy and there are a few more sophisticated strategies as referenced by some of the other answerers. However these apparently simple strategies though very effective require a great deal of cooperation between the government and the corporate world for the better good of not just the poor man but the country on a whole.

Answer 3

The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. Over time, as the cost of goods and services increase, the value of a dollar is going to fall because a person won't be able to purchase as much with that dollar as he/she previously could. While the annual rate of inflation has fluctuated greatly over the last half century, ranging from nearly zero inflation to 23% inflation, the Fed actively tries to maintain a specific rate of inflation, which is usually 2-3% but can vary depending on circumstances. opposite of deflation

Economic condition characterized by an increase in prices and wages, and declining purchasing power. Inflation is usually measured by changes in the Consumer Price Index (CPI). The result is diminished purchasing power, and frequently a lower rate of savings as wage earners put more of their disposable assets in consumption, and less in long-term savings. Inflation is a monetary phenomenon. It occurs when there is too much money in circulation relative to the production of actual goods and services. Federal Reserve Monetary Policy is the only means of controlling inflation, although Fiscal Policy can help as well.
Inflation is when prices continue to creep upward, usually as a result of overheated economic growth or too much capital in the market chasing too few opportunities. Usually wages creep upwards, also, so that companies can retain good workers. Unfortunately, the wages creep upwards more slowly than do the prices, so that your standard of living can actually decrease.

Answer 4

Inflation is the sustained rise in the general price level of a commodity.It is of several types:
1 creeping inflation
2 galloping infltn
3 trotting infltn
4 Suppressed infltn
5 Stay infltn
6 Sporadic infltn
Inflation arises when the demand 4 a commodity is more than its supply.

Answer 5

the continuous rise in the prices.
suppose the price of one computer in 2006 was $350 and in 2007 the price os the same computer went up to $400.
the inflation rate = (400/350-1)*100 = 14.28%
so we say the inflation rate is 14.28% which means prices went up from 400 to 350 which shows an increase of 14.28 percent.

Answer 6

Inflation means that it takes more money to purchase the same thing from a previous date.

For instance 30 years ago a loaf of name brand bread was less than one dollar. A car could be purchased for less than $5000.00. Gas sold for less than 40cents. The costs of these same items today is greater and that would be inflation.

Answer 7

In simple terms it means a Price rise resulting because of
higher demand in relation to supply of the concerned product.

Answer 8

In simple words, taking truck load of currency to market and can be able to purchase a small bag full of commodities.

Answer 9

WHEN DEMAND OF GOODS INCREASE AND MONEY VALUE DECREASE IN THIS CASE CREAT GOODS COSLTLY SO WE CALLED INFLATION.

Answer 10

like a deal