Bondholders earn fixed interest income: Besides this natural problem there are man-made problems like hoarding which contribute to the rapid increase in prices. So it is the root cause in making and affecting economy and people of the country poor.
Domestic production should be encouraged instead of imports; investment should be given preference in consumer goods instead of luxuries, Agriculture sector should be given subsidies, foreign investment should be attracted, and developed countries should be requested for financial and managerial assistance.
This practice should strictly discouraged. It is an increase in the overall price level. When debts are repaid their real value declines by the price level increase and, hence, creditors lose. Thus, money plays a vital role. A wage-price spiral comes into operation.
This type of inflation is caused by the printing of currency notes. The major rise in the prices is because of the increasing prices of oil as increased prices of oil increase the cost of productionbut no such steps have been taken to control the oil prices.
Creeping or Mild Inflation: If a rate of price rise is kept at this level, it is considered to be helpful for economic development. Thus, there occurs a redistribution of income and wealth.
An individual may be interested in buying a house by taking a loan of Rs.
In general, profit is a rising function of the price level. Thus, an increase in aggregate demand at the full employment stage leads to an increase in price level only, rather than the level of output.
But some people gain during inflation at the expense of others. The German Inflation of s was also Catastrophic: The consumer is no less to blame for the state of affairs.For its part, inRobert Barro, a prominent Harvard professor and member of the Bank of England, published a comprehensive study linking inflation and the growth of more than countries, rich and poor, between andand reached the following conclusions: On one side is indicative of the economic theory, and.
Inflation can also be caused by federal taxes put on consumer products. We will write a custom essay sample on Inflation Impact on Economy. words essay on Inflation Apart from the natural factors and the man-made factors like hoarding that add to the rise in prices or inflation, the government too contributes its bit to the escalation of prices by imposing higher taxes on raw materials and finished products.
these measures will have a positive impact on the prices only. The solutions to inflation, including inflation policies and inflation in developing countries. Disclaimer: This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
You can view samples of. Essay on Inflation in India (Problem of rising prices) Category: National Issues of India On March 18, By Ajit Sen This article discusses the inflation, the current situation, the causes and the means to control inflation in India.
Free words essay on fake Currency and its impact on economy for school and college students. Counterfeit Money And Its Impact On Economy Counterfeit currency, better known as fake currency is the copied or imitation currency.Download