Inflation...??

Question

plzz help me understand d relation b/w inflation nd share market..

i just want to know dat how is share market effected by inflation..

why does share market fall/rise wid price rise/fall..

some basic reasons plzz.. so dat i can understand it well..!

thanx ..<3

Answer 1

more buyers then more sellers.

If someone has 1000 elephants for sale but there are only 100 potential buyers. Then the seller is going to be stuck with 900 extra elephants. Thus the seller must sell his elephants cheaper to sell them all.

thus the economy crashes and we all die.

Answer 2

supply and demand is the most basic reason.

Haha...the guy below explained it much better than me, give him ten points :-)

Answer 3

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.