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Inflation is the decrease in the purchasing power of a currency. That is, when the general level of prices rise, each monetary unit can buy fewer goods and services in aggregate. The effect of inflation differs on different sectors of the economy, with some sectors being adversely affected while others benefitting.
Monetary inflation is a sustained increase in the money supply of a country (or currency area). Depending on many factors, especially public expectations, the fundamental state and development of the economy, and the transmission mechanism, it is likely to result in price inflation, which is usually just called "inflation", which is a rise in the general level of prices of goods and services.
An increase in government spending is one of the factors that economists say can drive inflation. Other factors include interest rates, monetary policy, supply chain disruptions and fluctuations ...
Demand-pull inflation occurs when aggregate demand in an economy is more than aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as "too much money chasing too few goods". [1]
If high inflation strikes the American economy, high interest rates are likely to follow. Even though rising interest rates can make all types of financing -- from credit cards to home mortgages to...
Rising prices have been the big economic story of post-vaccine America, and inflation has evolved from a nagging nuisance to the most severe decline in the dollar's buying power in more than 30 ...
Assuming additionally that Y is exogenous, being independently determined by other factors, that V is constant, and that M is exogenous and under the control of the central bank, the equation is turned into a theory which says that inflation (the change in P over time) can be controlled by setting the growth rate of M. However, all three ...
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