What is inflation? Describe its root causes. Also explain how it can be controlled? Inflation: Inflation means generally rising money prices of goods and services. To understand what inflation is and is not, consider the above definition in detail: Goods and services: This refers not to stocks or bonds of other financial assets, but to the tangible and intangible commodities economic agents produce and sell to one another. These are commodities to be consumed or held for future use; e.g. food, haircuts, shelter, houses, health care, schooling, cars, tractors, machine tools. Money prices: This refers to amounts of money, dollars and cents in the United States, per commodity unit, e.g., per pound of butter, gallon of gasoline, haircut, bus trip, kilowatt hours, or diesel engine. In contrast, imagine the barter prices at which one commodity trades for another; e.g., 3 gallons of a gas for 1 hour of labour, two […]
What is inflation?how it can be controlled?
