Cause And Causes Of Inflation

What is inflation? Inflation is the widespread and sustained increase in prices of goods and services in a country. To measure inflation growth, we use indexes, which reflect the percentage growth of a weighted basket of goods. The index of measurement of the inflation is the Index of Prices to the Consumer (IPC). This index measures the percentage increase in prices of a basic basket of products and services that a consumer acquires in the country. What is deflation? Deflation is a general decline in the prices of an economy, which is the opposite of inflation. When deflation exists, the goods and services available in an economy fall in price and therefore they become cheaper. Deflation arises when the supply of goods and services in an economy

Formal definitions vary from an inflation rate of 100% over three years to inflation greater than 50% a month. The main cause of hyperinflation is a rapid and massive increase in the amount of money that is not supported by growth In the production of goods and services. We talk about hyperinflation when the phenomenon of inflation is uncontrolled, when prices of goods and services increase in a high rate while the national currency loses its value at an accelerated rate. This destroys the middle class, the savings and pension funds evaporate, life insurance loses its value, etc. So basically Hyperinflation can destroy a country’s

People feel that they no longer have the salary to maintain their standard of living and will try to increase their income or resort to debt, otherwise they will have to experience a decrease in their standard of living. Also, when purchasing capacity decreases, employees tend to demand an increase in wages and if they do, firms will move the cost increase to the final price of the product, creating an inflationary spiral. Inflation is also detrimental to lenders in fixed amounts, as the value of the loan they provide is lost over time, but for the same reason can be beneficial to the