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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.

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Q: What will happen if everyone expects inflation to occur?
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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%


What is the definition of economic inflation?

Economic inflation or just inflation is the rate at which the general level of prices for goods and services is rising. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum. Inflation or deflation will always occur in a economy but the role of the Fed is to make less severe.

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To happen or occur


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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.


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