answersLogoWhite

0

If people expect inflation, they are more inclined to spend than save money which will lose its value. A surge in demand will cause an an increase in prices (because demand exceeds supply) and voila! Inflation.

User Avatar

Wiki User

11y ago

What else can I help you with?

Continue Learning about Economics

When do inflation occur?

When goods or services in general cost less in the deflated currency than previously.


How does Krugman feel about inflation?

Paul Krugman, a columnist with The New York Times, has published an article that promotes the view that inflation should be allowed to occur. High inflation, he states, promotes spending over saving, and reduces the real value of any debts.


What is pricing power inflation?

Pricing Power InflationPricing power inflation is more often called administered price inflation. This type of inflation occurs when the business houses and industries decide to increase the prices of their respective goods and services to increase their profit margins. Pricing power inflation does not occur at the time of financial crises and economic depression or when there is a downturn in the economy. This type of inflation is also called oligopolistic inflation because oligopolies have the power of pricing their goods and services at whatever levels they want.


What is diflation?

Deflation is decrease in general price level of services and goods. Deflation occur when inflation rate is 0%


Who gets hurt the most by inflation?

Almost everyone. It would be easier to list those who would not be hurt. Certain investors and stocks/shares speculators would not be hurt as far as their investment goes but they would be adversely affected in other areas. Inflation (very simply put) means that the monetary value of something increases. If it is prices then people have to pay more. If it is wages then the employers have to charge more for their goods or services. In theory, if there were no inflation of any type, then the entire economy would remain stable. However this is not possible in a practical world. Because countries trade with each other, we all want to earn more etc then inflation will occur somewhere which in turn will affect (hurt) almost evryone to some extent.

Related Questions

Can earthquakes occur during volcanic eruptions?

Yes this can happen. this will make it really worse if it does happen. Thismight kill everyone. Imagine this and you are there and you have some children?


How does making the readers astray help in building up tension in stories?

If the reader expects one thing to happen, and other things begin to occur that they didn't think about, that will build up their tension and make them want to read more to see what you're going to have happen next.


Why did inflation occur after the war?

a low supply of goods and widespread demand


Why did inflation occur after ww1?

A low supply of goos and a widespread demand


When do inflation occur?

When goods or services in general cost less in the deflated currency than previously.


How do you explain the who what when why how?

Who was involved, What happened, When did it occur, Why did it occur, and How did it happen.


What is the formal word for the word happen?

"Occur" would work, however, happen is appropriate in most situations.


What has the author James Bullard written?

James Bullard has written: 'Did the great inflation occur despite policymaker commitment to a Taylor rule?' -- subject(s): Industrial productivity, Inflation (Finance)


What is a synonym for happen?

Occur.


What is befell?

To happen or occur


How does Krugman feel about inflation?

Paul Krugman, a columnist with The New York Times, has published an article that promotes the view that inflation should be allowed to occur. High inflation, he states, promotes spending over saving, and reduces the real value of any debts.


Where do cylcones happen?

Cyclones occur in the Pacific. Hurricanes occur in the Atlantic