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  • Answer: There are many causes for inflation, depending on a number of factors. For example, inflation can happen when governments print an excess of money to deal with a crisis. As a result, prices end up rising at an extremely high speed to keep up with the currency surplus. This is called the demand-pull, in which prices are forced upwards because of a high demand.
    Another common cause of inflation is a rise in production costs, which leads to an increase in the price of the final product. For example, if raw materials increase in price, this leads to the cost of production increasing, which in turn leads to the company increasing prices to maintain steady profits. Rising labor costs can also lead to inflation. As workers demand wage increases, companies usually chose to pass on those costs to their customers.
    Inflation can also be caused by international lending and national debts. As nations borrow money, they have to deal with interests, which in the end cause prices to rise as a way of keeping up with their debts. A deep drop of the exchange rate can also result in inflation, as governments will have to deal with differences in the import/export level.
  • Answer: Inflation cannot be attributed to one specific causes,
    The list of causes may be,

    Less Supply more Demand

    Short term FII investments also fuels inflation

    More money in circulation because of policies followed by the government and presence of more money that an economy can effectively handle.

    Price volatility and natural disasters results in inflation.

    For Indians Also read,
  • Answer: Inflation starts when a country goes into an economic crisis(like the great depression). When the government runs out of money to spend, they start to print more. When there is more money being printed, prices in stores go up. And not just up a little. For example the price of bread at a time like this could be well over a hundred dollars. As an effect the value of your money goes down and down until it is almost worth nothing.
  • Answer: the economy is uder inflation because ther is a lack of resources therefore we the indivdual have to depend on other things in order to meet our needs and we sometimes too have to depend on our government for help.
  • Answer: The question is incomplete. No options are given (for which of the following) to answer the question.
  • Answer: will have no money ideat but the press do make it sound worse then it is
  • Answer: Inflation is, essentially, a rise in prices i.e. a rise in the price level. It can be caused by many factors. Among these are:
    Increase in exogenous consumption
    Increase in exogenous investment
    Increase in government expenditures
    Decrease in taxes
    Increase in money supply
    Decrease in exogenous money demand

    The effect is that goods are more expensive. In addition, if wages do not change, real wages (found by dividing wages, W, by the price level, P) decrease due to an increase in the price level.

What is the predicted rate of inflation for 2009 in the US?

  • There is no official predicted rate of inflation for 2009. Official inflation statistics do not go that far into the future, but you could probably find estimates on various economic magazines such as the Wall Street Journal, IBD, or The Economist.

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