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Inflation

  • Date Submitted: 10/03/2015 11:04 AM
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10/7/2015
10/7/2015
INFLATION
Effects of inflation on economy of pakistan
INFLATION
Effects of inflation on economy of pakistan

Mohsin Raza
Sohaib yousaf
sadam hussain
HAmid
MUstafa
Mohsin Raza
Sohaib yousaf
sadam hussain
HAmid
MUstafa

INFLATION
(Effects of inflation on economy of Pakistan)
Introduction:
                                During World War II, you could buy a loaf of bread for $0.15, a new car for less than $1,000 and an average house for around $5,000. In the twenty-first century, bread, cars, houses and just about everything else cost more. A lot more. Clearly, we've experienced a significant amount of inflation over the last 60 years. 

When inflation surged to double-digit levels in the mid- to late-1970s, Americans declared it public enemy No.1. Since then, public anxiety has abated along with inflation, but people remain fearful of inflation, even at the minimal levels we've seen over the past few years. Although it's common knowledge that prices go up over time, the general population doesn't understand the forces behind inflation.

What is inflation??
Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. 

The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically an Rs10 pack of gum will cost Rs10.2 in a year. After inflation, your dollar can't buy the same goods it could beforehand.
Types of Inflation
There and following types of inflation.
  1. Demand pull inflation: Demand-pull inflation occurs when there is an increase in aggregate demand, categorized...

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