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Inflation. What Does It Really Means?

i re-read a confusing topic in economics "inflation"

as i went through the causes and effects of inflation

i discovered that what d textbook was telling me was "having too much money and less goods in circulation will cause inflation

does that mean it is better to be poor as far as economics are concerned, have money that will be enough to take care of u and ur family without injections and increment of income?

i started thinking of inflation in nig and started guessing d reason behind it and d solution to it{that is if it's possible to solve it}

i talked to somebody abt it and d person said d reason for inflation in nig is too much and that it probably can never be solved

is that true?

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7 answers

thank you very much for your replies

now i have the correct meaning, causes and effects of inflation

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Persistent increase in price of goods and services. if not satisfied, contact: mamma.com

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@ouland

, a miatake, not discuses but discussed!

pardon me.

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Inflation is a world-wide phenomenon, the most serious

in history being the hyper-inflation of Germany in 1930's

Inflation may be defined as a sustained rise in the general

level of prices.It is characterised by prevalence of increase

in prices generally, not just increase in the prices of one or few

commodities and this increase must be sustained over time.

It is possible to have a fluctuation in prices of certain commodities,

like agricultural commodities,as a result of shortfall in supply due

to seasonal factors.This cannot be counted as inflation.One general

way by which people notice inflation is that once triggered off,the

price increase tend to be general,affecting practically all prices and

it is continous!

There are two major thories of inflation.

The Keynesians believe that

excessive investment ang government expenditure will cause

inflation,when higher in aggregate than saving. That is when

injection into the economy is more than the withdrawal.

The Monetarist, on the other hand believe that inflation

is solely monetary phenomenon arising from excessive

growth of money supply.

In conclusion,the major enemy of any economy

is nothing but STAGFLATION! More of this will

be discusses in our about to be launched

site at http://www.naijaeconomists.com

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It means the Economic rate has increased.

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chk the dictionary or economic txt book

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