inflation answer

7/27/2019 Inflation Answer

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Inflation is due to an increase in the amount of circulating currency beyond the needs of

trade. Over supply of currency thus created,in accordance with the laws of supply and

demand,decreases the value of money, or more accurately increases the prices of goodsand services. In the early 1980's recession lowered the inflation rate in the U.S. The

opposite of inflation is deflation, a time of falling prices, curtailed business activity and

high unemployment. Depression, in economics, is a period of economic crisis,characterized by falling prices, restriction of credit, reduced production, numerous

bankruptcies and high unemployment. A less severe crisis is known as a downturn, or

recession. Depressions now tend to become worldwide in scope because of the nature oftrade and credit. Inflation, if it remains unchecked by some artificial means such as

taxation and other fiscal measures, seems to be somewhat more of an agravation than

recession as it can lead to downturns and severe economic dislocations ending in

recession or worse depression, since consumers(which are one of the driving facets ofeconomies)end up having less money that is worth less and thus purchases less. Maybe

it's a toss up as to which is worse. Neither is economically good. It is essentially a

balancing act, so when you come up with an economist that can perform such an act it is

of some importance. Inflation may occur in times of political upheaval, and it commonlyoccurs during times of war, when governments borrow and when there is a limited supply

of consumer goods. In the 1970's the onset of worldwide inflation was attributed to thesoaring cost of petroleum.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct No

2008 211.080 211.693 213.528 214.823 216.632 NA NA NA NA NA

2007 202.416 203.499 205.352 206.686 207.949 208.352 208.299 207.917 208.490 208.936 210.

2006 198.3 198.7 199.8 201.5 202.5 202.9 203.5 203.9 202.9 201.8 20

2005 190.7 191.8 193.3 194.6 194.4 194.5 195.4 196.4 198.8 199.2 19

2004 185.2 186.2 187.4 188.0 189.1 189.7 189.4 189.5 189.9 190.9 19

2003 181.7 183.1 184.2 183.8 183.5 183.7 183.9 184.6 185.2 185.0 18

2002 177.1 177.8 178.8 179.8 179.8 179.9 180.1 180.7 181.0 181.3 18

2001 175.1175.8

176.2 176.9 177.7 178.0 177.5 177.5 178.3 177.7 17

2000 168.8 169.8 171.2 171.3 171.5 172.4 172.8 172.8 173.7 174.0 17

Get more Historical Data from InflationData.com
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Blank Cells = Data not available because it has not been released by the Bureau of Labor Statistics.

YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV

2008 4.28% 4.03% 3.98% 3.94% 4.18%

2007 2.08% 2.42% 2.78% 2.57% 2.69% 2.69% 2.36% 1.97% 2.76% 3.54% 4.312006 3.99% 3.60% 3.36% 3.55% 4.17% 4.32% 4.15% 3.82% 2.06% 1.31% 1.97

2005 2.97% 3.01% 3.15% 3.51% 2.80% 2.53% 3.17% 3.64% 4.69% 4.35% 3.46

2004 1.93% 1.69% 1.74% 2.29% 3.05% 3.27% 2.99% 2.65% 2.54% 3.19% 3.52

2003 2.60% 2.98% 3.02% 2.22% 2.06% 2.11% 2.11% 2.16% 2.32% 2.04% 1.77

2002 1.14% 1.14% 1.48% 1.64% 1.18% 1.07% 1.46% 1.80% 1.51% 2.03% 2.20

2001 3.73% 3.53% 2.92% 3.27% 3.62% 3.25% 2.72% 2.72% 2.65% 2.13% 1.90

2000 2.74% 3.22% 3.76% 3.07% 3.19% 3.73% 3.66% 3.41% 3.45% 3.45% 3.45

1999 1.67% 1.61% 1.73% 2.28% 2.09% 1.96% 2.14% 2.26% 2.63% 2.56% 2.62

1998 1.57% 1.44% 1.37% 1.44% 1.69% 1.68% 1.68% 1.62% 1.49% 1.49% 1.55

1997 3.04% 3.03% 2.76% 2.50% 2.23% 2.30% 2.23% 2.23% 2.15% 2.08% 1.83

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CAUSES OF INFLATION

Inflation can also be caused by international lending and national debts. As nations

borrow money, they have to deal with interests, which in the end cause prices to rise as away of keeping up with their debts. A deep drop of the exchange rate can also result in

inflation, as governments will have to deal with differences in the import/export level.

Finally, inflation can be caused by federal taxes put on consumer products such as

cigarettes or fuel. As the taxes rise, suppliers often pass on the burden to the consumer;the catch, however, is that once prices have increased, they rarely go back, even if the

taxes are later reduced. Wars are often cause for inflation, as governments must both

recoup the money spent and repay the funds borrowed from thecentral bank. War oftenaffects everything from international trading to labor costs to product demand, so in the

end it always produces a rise in prices.

How to control inflation in the whole world?

Answerer 1

Simple. If some people spread the news that gold is going to be costlier in days tocome people start buying gold and prices rise or inflation will be created. If some

people say or spread the news that fuel is going to be cheaper in future people
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stop buying and prices come down. Influential people can play game now and

create or control inflation as the case may be and reap fruits. In this world of

advanced mass media any news can be spread fast through out the world.Why economists do not understand this? Simple. Economists never studied

wealth the way chemists studied matter. They have not classified wealth into

current or present wealth and future wealth. It is value of future wealth that drivesinflation and not mere demand and supply of present wealth. Remember that

value of future wealth is largely psychological. If you bring down value of future

wealth value of present wealth comes down and inflation is controled.

Answerer 2

Why would we need another industrial revolution? And we've never had a green

revolution to begin with......industry and the corporate fat cats still control global

policy. An industrial revolution would only increase industrial output further and

we don't have a need for it like in the 1800's.

Answerer 3

some people spread the news that gold is going to be costlier in days to come

people start buying gold and prices rise or inflation will be created. If some

people say or spread the news that fuel is going to be cheaper in future people

stop buying and prices come down. Influential people can play game now andcreate or control inflation as the case may be and reap fruits. In this world of

advanced mass media any news can be spread fast through out the world.

Why economists do not understand this? Simple. Economists never studiedwealth the way chemists studied matter. They have not classified wealth into

current or present wealth and future wealth. It is value of future wealth that drivesinflation and not mere demand and supply of present wealth. Remember thatvalue of future wealth is largely psychological. If you bring down value of future

wealth value of present wealth comes down and inflation is controled

Answerer 4

"We" cannot control inflation. All we can do is to utilize and promote sensibleeconomic and trade policies and let the market take its course.

Answerer 7

I dont know about the world but to control inflation in India and increase the

value of rupee, we need to promote our own products,which are made and

maufactured in India.We need to give up multinational brands. Use Indian

products.Thats the Japanese Mantra, the solution to control inflation.

o

Answerer 8


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Be aware and try to stop corruption at every stage with fearless actions.

Answerer 9

No Revolution are required, bring back the barter system, like if a country

resources are more in oil, let them give that for getting their other commodities inexchange, if they require man power, knowledge the same way let them exchange

technology, and other needed items for the other countries. and also mainly

abolish the duty, (excise, customs etc.,) and allow people to do their across borderbusiness freely. do not insist for Passports. call the terrorist organisation to table

and do dialogue, give human rights an importance and make a common civil code

across the globe. help the backward countries to come up.

Answerer 10

Stop wars, Because 90% of the war happens in Middle east.. And the initiator is

USA to steal the oil from arabian gulf.. Bull Shits.. Then crude oil price will comedown .. Because it is the main commodity which drives the world economy..

Increase the fuel price in USA.. Then ppl consume less..

Answerer 11

o to attract the investors all throughout the world.

making good deals with the MNC's -providing tax deduction.

increasing privet sector to (ware the GOVT frequently monitors them)

such that production increases and the prices come down.

Answerer 12

controlling inflation in our country itself looks impossible the whole world can

even think of it

Answerer 13

The goods of the world belong to the people of the world. When a group ofpeople believe that they have a right to have more than the others,inflation is

bound to crop up.inflation can be considered the index of the selfishness of

people. the only solution to inflation is material justice and compassion.

o

Answerer 14

Moral revolution. The sting of death is sin. greediness is sin that's why it brought

about death. Death of children, wars, innocents.The world's riches can

accommodate all what we need. Even if one country gain the riches of all the


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world it will still not satisfy everyone if there is greediness in the air. We need to

go back to the Way of the ancient church. "And they lack nothing" because

everyone share what they have.

Answerer 15

All males should undergo vasectomy and the problem is solved easily

Answerer 16

by plant trees we can control inflation in the whole world

Answerer 17

"control" implies a controller which implies government, which some think is the

only provider of "money", but by that causes inflation in the first place via

manipulation of the money supply.

Natural "control" of inflation results from a trusted and stable money supply.Government control results in instability and resulting hardship on all.

Answerer 19

So far as possible to be own our foot. I mean to live with what is available from

the earth in that sourroudings. Try to avoid petroliem based energy as far as

possilble. Aviod unnecessary travel other than walking,do not use electricity otherthan at most necessary time. Never think of wasting food.Produce more locally

for the locals and aviod import. Do not go for imitations which are not in ourinterest.

Answerer 20

World/2=USA

This is the simple formula to understand that the USA is consuming the 1/2 part

of the total resources. So if americans started to control using the resources, the

inflation will be controlled.....

Answerer 21

It is only the tightening of the belt, means maximum saving by the individuals.

But in Indian context, where in system of doling in the election year, is there

reduction in inflation is impossible. Politicians are appeasing farmers through

doling Rs.71.00 Cr. , without surveying the actual condition of farmers, whetherthey are in need or not.Tendencies of affluent farmers who had and can pay will

reduce.


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India's inflation will peak at 14-14.5 % in Dec

Commodity OnlineNEW DELHI : Indias inflation could reach a peak of 14-14.5 percent in

December this year as there seems no sign of abatement in oil prices.

Moreover, fuel prices may be hiked further in October 2008, according to aASSOCHAM Eco Pulse (AEP) Study.

As per the AEP Report on Inflation and Interest Rates, the trickle downimpact of hiked fuel prices spilling over to other commodities by the month of

December this year . Coupling with low-base effect, inflation as measured by

WPI Index would peak to 14 -14.5 per cent level as compared to 3.8 per centin December 2007.

As inflation is likely to rise till December 2008, there could be further

tightening of monetary policy pushing the already high interest rates further

up, said Mr. Sajjan Jindal, President, ASSOCHAM.

The study found that if the lending rates go up by another 50-100 basis points,non-food credit off take may come down to 19-20 per cent in the present

financial year and home loan growth may dip to 5-7 per cent

During April-May 2008, inflation has been in the range of 7.7 per cent to 8.75

per cent. In the same time period in 2007, it hovered about 6.44 per cent to

5.15 per cent.

However, with the beginning of July 2007, the rate of increase in the WPI

Index had reduced to the levels of 4 per cent. Subsequently, it had gone downto the levels of 3 per cent till December 2007.

As the interest rates started rising in 2004, the growth rate of housing loans

and non-food credit has been declining. The housing loan growth has fallen toabout 12 per cent in 2007-08 (as on February 15, 2008 on yearly basis), from

49 per cent in the financial year 2004-05.

The non-food credit off take has been slowing from 26.5 per cent in fiscal

2005 to 22.3 per cent in fiscal 2008, with an exception of 2005-06, when it

grew at 31.8 per cent. Non-food credit expanded at 26.55 per cent on yearly

basis as on June 20, 2008.

While the demand for corporate borrowings may increase by oil companies, it

may be partially offset by players from other sectors who are likely to prefersuppliers credit instead of bank credit.

The suppliers credit costs around 8-9 per cent against 12-14 per cent beingcharged by the banks for working capital financing.


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inflation answer

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