Good at business studies n economics? answer this then...?

Question

what is Inflation?

why is it in news so often now?

how has it affected the world economy?

in what ways has it affected d US economy?

which is the worst hit economy?

how can v cope up with this problem?

h**l i have a project due tomorrowwwww!!! need help plzzz!!!

Answer 1

The definition of inflation is when too many dollars are chasing too few goods. This causes general prices to go up for the same goods. However, if there is too little money in the system, this causes deflation, which can slow down production, causing recession.

So, the job of the Fedeal Reserve is to raise or lower the money supply so that it balances the goods produced, allowing a smooth and steady growth.

Economists and business people are always concerned about inflation and recession. In the past year, the price of gas at the pump has doubled. This is called sector inflation for energy only. This has been in the news.

There is a concern among economist that, because gas is purchased by many companies, that this dramatic jump in gas prices will cause the price of many other things to go up, and cause general inflation.  However, this has not happened yet.

The biggest impact of energy sector price increases to date is that it slows down other consumer spending, and may slow down economic growth.

These problems have not caused major disruptions in any economy yet. As with many other problems, the poorer nations will have the greatest problem if global inflation rises or if there is any global recession.

Because global oil prices as (well as global food and other prices) are the result of complex global political, economic and natural systems, the US does not have the options of direct, simple solutions. The root cause of the problem is the near static supply of global oil coupled with a growing need for oil in China, India, South America and Eastern Europe. Any US only solutions, be they in drilling new fields, diplomacy with producing states, conservation or alternative sources such as nuclear, cannot be signifcantly implemented short term and will not solve the immediate crisis.

Here is an inflation graph, with data:

http://www.csus.edu/indiv/j/jensena/sfp/...

Answer 2

Inflation is when there is a general increase in price. It can be measured by the CPI.

The recent rise in oil prices causes inflation. As oil is needed  in many industry, production cost rises and prices of goods rises, resulting in inflation.

Inflation means that the general public has less spending power and thus has a lower demand. Since much of economic activities are brought about by consumer demand, economic growth may suffer.

In order to stabilize the prices, we may make attempts to lower interest rate.