Inflation

Inflation became a monetary phenomenon in Ghana when their currency reserves ran out in the 1960s, forcing rescheduling of debt payments. Governments attempted to maintain fiscal policy planning by printing large sums of money to finance largely inefficient public investment.

Unemployment and inflation are two intricately linked economic concepts. Over the years there have been a number of economists trying to interpret the relationship between the concepts of inflation and unemployment. There are two possible explanations of this relationship - one in the short term and another in the long term. In the short term there is an inverse correlation between the two. As per this relation, when the unemployment is on the higher side, inflation is on the lower side and the inverse is true as well.

This relationship has presented the regulators with a number of problems. The relationship between unemployment and inflation is also known as the Phillips curve. In the short term the Phillips curve happens to be a declining curve. The Phillips curve in the long term is separate from the Phillips curve in the short term. It has been observed by the economists that in the long run the concepts of unemployment and inflation are not related.

As per the classical view of inflation, inflation is caused by the alterations in the supply of money. When the money supply goes up the price level of various commodities goes up as well. The increase in the level of prices is known as inflation. According to the classical economists there is a natural rate of unemployment, which may also be called the equilibrium level of unemployment in a particular economy. This is known as the long term Phillips curve. The long term Phillips curve is basically vertical as inflation is not meant to have any relationship with unemployment in the long term.

It is therefore assumed that unemployment would stay at a fixed point irrespective of the status of inflation. Generally speaking if the rate of unemployment is lower than natural rate, then the rate of inflation exceeds the limits of expectations and in case the unemployment is higher than what is the permissible limit then the rate of inflation would be lower than the expected levels. The Keynesians have a different point of view compared to the Classics.

The Keynesians regard inflation to be an aftermath of money supply that keeps on increasing. They deal primarily with the institutional crises that are encountered by people when they increase their price levels. As per their argument the owners of the companies keep on increasing the salaries of their employees in order to appease them. They make their profit by increasing the prices of the services that are provided by them. This means there has to be an increase in the money supply so that the economy may keep on functioning. In order to meet this demand the government keeps on providing more money so that it can keep up with the rate of inflation.

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This is the fourth major type of inflation. The sectoral inflation takes place when there is an increase in the price of the goods and services produced by a certain sector of industries. For instance, an increase in the cost of crude oil would directly affect all the other sectors, which are directly related to the oil industry. Thus, the ever-increasing price of fuel has become an important issue related to the economy all over the world. Take the example of aviation industry. When the price of oil increases, the ticket fares would also go up. This would lead to a widespread inflation throughout the economy, even though it had originated in one basic sector. If this situation occurs when there is a recession in the economy, there would be layoffs and it would adversely affect the work force and the economy in turn.

Govt measures inflation status by using economic policy instrument, fiscal and monetary policy directed toward market structure and the level of unemployment rate in the economy, because inflation and unmployment are corrolated. Finaly Govt mesure unemployment through inflation and inflation through unemployment.

In the last month, rough rice.

INFLATION IS NECESSARY(magar jis speed se mehngai bsdhai h us speed se nhi)

because you put more weight on your bike, therefore making it more difficult to ride.

The same way you measure CPI, but you only take into consideration domestic goods. So if the prices of Sony, Siemens (any product produced outside USA)etc notebooks rises up 20% in USA this year, but only because the import price was higher, it will not affect GDP price index but will affect the CPI

the economy is operating at full employment. Note: full employment is not the same as zero unemployment.

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mild inflation is better because in the first place it motivates producers in producing more, since price increase is an incentive to them. secondly , excess demand will be partially regulated in mild inflation coz price increase reduces, hence, prospects of higher inflation minimised.

zero inflation on the other hand demotivates producers coz there are no changes in price levels, this leads to low out put and hence, loss of GDP and consequently unemployment may crop in.

by griffin masoambeta miracle year 2 bunda college of agriculture, Lilongwe university of agriculture and natural resources(LUANAR)

An expansion

Yes , because repressive governments doesn't believe in human rights. :) apex @you_CRAVE_gucci bxtches <3

inflation means the price level is very high in the society. more money chasing few goods that s called inflation .

inflation

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Inflation means an overall increase in the prices of goods and services. It is a decrease in the value of a currency. There are three types of measurement, Core Inflation, CPI, and WPI. Core Inflation is a measurement of non-volatile goods such as food and non-precious metals. It leaves out goods like oil because oil's price is subject to wild fluctuations. CPI is the most common measurement, using a market basket of goods and measuring their price from a point in the past (a CPI of 100 is arbitrarily the same price level for 1982-1984). Thus, the euqation is (Price of most recent market basket/price of same market basket in 1982-1984) X 100. The 100 is to give us the number we normally see. WPI is Wholesale Price Index. It is a measure of wholesaler's prices and is generally considered a pre-cursor to what CPI will be (as it takes time for goods to read the consumer).

The percentage rise in price level- Apex

How quickly prices are rising.

the state provides many social services

Inflation is related to the laws of supply and demand, as well as how much money is available to put into the economy.

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Yes, inflation and increases in interest rates usually go hand-in-hand, though inflation is not the sole cause of an increase in interest rates

Inflation has increased by around 5.7 percent since 1972. A dollar in 1972 would be equivalent to $5.7 in 2014.