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Inflation in the World

  • Date Submitted: 03/14/2010 08:40 AM
  • Flesch-Kincaid Score: 48.3 
  • Words: 2361
  • Essay Grade: 3,00 /5 (1 Graders)
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The population now a days is increasing rapidly. So this increase in population is the cause of great problem. This problem (of increase in population) is not only the problem of Pakistan, India or china but every country is facing this problem. And the demands of this increasing population are also increasing which is actual cause of the problems. And the major problem is the rise in the prices of the things which in short is called inflation .this is cause of almost al other problem and every country is trying to   control this problem.
            Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
          Inflation originally referred to the debasement of the currency. When gold was used as currency, gold coins could be collected by the government, melted down, mixed with other metals such as silver, copper or lead, and reissued at the same nominal value. By diluting the gold with other metals, the government could increase the total number of coins issued without also needing to increase the amount of gold used to make them. When the cost of each coin is lowered in this way, the government profits from an increase in seigniorage. This practice would increase the money supply but at the same time lower the relative value of each coin. As the relative value of the coins decrease, consumers would need more coins to exchange for the same goods and services. These goods and services would experience a price increase as the value of each coin is reduced.

In short this can be written as
        Inflation refers to a rise in prices that causes the purchasing power of a nation to fall.
Other related economic concepts include:
        A fall in the general price level;
Disinflation –
        Decrease in the rate of inflation;
Hyperinflation –
        An out-of-control inflationary spiral;
Stagflation –
        A combination of inflation, slow economic growth and high...


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    • Feb 15, 2012 - Evaluator: (sumbul)
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