What are the major factor for high inflation rate ?

Question

What are the major factor for high inflation rate ?

Answer 1

When supply of money is more than the s upply of commodities then inflation occurs. Main factors are: increase of unproductive expenditure, excess release of money into market, less bank rate, etc.Recent global inflation is due to effect mindless globalisation and hike of petroleum products.

Answer 2

Today's Inflation is 8.1%,Major factors effecting are price hike of essential commodities,the subsidies provided by the Govt.to farmers or small scale industries to support the monetary benefits, fiscal deficits born by Govt negligences. Moreover Political Wills to increase the price in front of election and reduce when declares.Also predicting of monsoon.

Answer 3

High Inflation will only occur if prices (ex- Food/Energy) begin rising. So if that trucking company which deliveries iPods to Best Buy has to now pass on the cost of higher diesel fuel into their delivery charge and Best Buy rolls that cost into the price you pay for that iPod, we've got Inflation.

Of course Inflation really only exists because of a Federal Reserve Monetary Policy.  They can quick kill inflation by reducing the money supply and preventing you from raising prices. Of course, that effect will cause businesses to go under and lead to high unemployment until the economy adjusts to the constricted money supply.

Answer 4

uncontrollable growth of a of a particular sectors of country is the major factor for high inflation rate

Answer 5

High inflalton rate -- factors -- your pay check will not buy as much as it did last month.   Last month gas was $3 and now it is $3.25 -- that is a tremendous increase and I am forced to buy less gas for my vehicle.  But, in the same content -- I bought a motor cycle at 40mpg and that helps me to cope with the increase in prices...

Answer 6

block marketing  products and software industry

Answer 7

In the long run inflation is generally believed to be a monetary phenomenon while in the short and medium term it is influenced by the relative elasticity of wages, prices and interest rates.[6] The question of whether the short-term effects last long enough to be important is the central topic of debate between monetarist and Keynesian schools. In monetarism prices and wages adjust quickly enough to make other factors merely marginal behavior on a general trendline. In the Keynesian view, prices and wages adjust at different rates, and these differences have enough effects on real output to be "long term" in the view of people in an economy.

A great deal of economic literature concerns the question of what causes inflation and what effect it has. There are different schools of thought as to what causes inflation. Most can be divided into two broad areas: quality theories of inflation, and quantity theories of inflation. Many theories of inflation combine the two. The quality theory of inflation rests on the expectation of a seller accepting currency to be able to exchange that currency at a later time for goods that are desirable as a buyer. The quantity theory of inflation rests on the equation of the money supply, its velocity, and exchanges.