What does inflation mean?

Question

inflation and unemployment -trends and outlook

Answer 1

Inflation is a rise in the cost of goods caused by an increase in the supply of money which devalues the currency.  

Answer 2

It's funny -- inflation is almost like a dirty word these days. Inflation is so complicated, even though all it means is that the average price of goods and services -- excluding energy and food -- is going up. And that's okay; it happens naturally -- because wages go up. Most economists agree that inflation below 3% is okay. Yes, inflation devalues currency. A dollar today would not be worth what it would be 20 years ago. But that's okay, because wages have risen also -- that's that cost of living thing. Inflation gets out of control when people expect prices to continue to rise, and, thus, stop buying things. This causes unemployment; even though prices generally continue to rise. Look at the 1970s, for example. The key to controlling inflation is for the Federal Reserve to crank up interest rates (see 1982). Then people stop spending money because it is more lucrative to invest. So prices fall.

Inflation and deflation are hard to understand because, in many ways, they become self-fulfilling prophecies. But, be sure to understand, that deflation is far worse than inflation. And the Federal Reserve is designed to create economic stability. Generally, they do a pretty good job of it. The recession of 1982 was the worst since the Great Depression, but much shorter. American prosperity has a lot to do with the Fed controlling -- effectively -- the money supply.  

Answer 3

Inflation refers to the rise in cost of goods and services.

When I was a child, a candy bar was five cents.  Now the same candy bar is fifty cents.  That's inflation.

Answer 4

unemployment is continuing to rise, so will inflation.

Answer 5

I'll try to explain at my best- inflation is quite simple yet sophisticated.

Inflation is, to put simply, when the country produces TOO much money and not enough products.

So it basically means rarity of products.

If there is ONE TV in the whole world, many people will trying to buy it, presuming NO one has a TV. Highest bidder will get the TV, so the original price of $1000 will be raised to $1500, 3000, maybe some kind of idiot will try to buy it for $10 000 (example of a hyperinflation).

Hope I helped~  

Answer 6

Inflation is the rise in prices of the commodities compared to the previous years price index. basically its the value of money with which one can buy. if the inflation is 5% you need 105 to buy the same items compared to what u can buy with 100 in the previous year. there are some reasons for this inflation like the price of crudeoil, population growth, growth of economy etc. oil contribute much to the consumer as the food miles price increaes. scarsity too contribute to inflation a bit. if there is an incerase in population the economy too has to grow as fast as population other wise the demand will be higher and supply will be scare which leads to scarsity and price rises.

the industries too get effected by inflation as the raw material and production cost increases, one has lay off employees to control their price.

Answer 7

Although those are intelligent answers, all of them fall under a big economic fallacy. Inflation is really the devaluing of the dollar which results in higher prices. Due to Federal Reserve Economic Policy, the more money that the government prints, the less our dollar will be worth since it is no longer backed by value such as gold. So 1 dollar would not be worth 75 cents. This results in prices rising because it costs more money to buy something. For example, before inflation (not accurate), you could by two eggs for a dollar, but since the government printed more money, the dollar is now 50 cents which means the price of eggs would be a dollar for one egg as opposed to a dollar for 2 eggs. Hope this helps

Answer 8

inflation is when the cost of living goes up,  

Answer 9

increase in prices.