what causes inflation?
116657
Inflation is classically caused by rising interest rates.  When money is harder to borrow (higher rates), harder to come by, then goods and services end up rising in value in response.  Because people need to borrow (from credit and ARMS and whatnot), they are forced to charge more for whatever they are selling or performing.  So they begin to raise their prices, and everyone else needs to do likewise.  The best way to stop inflation, generally, is to lower the interest rate.
56670
The price of an item is determined mostly by who and how many want to buy it, and how many are able to buy it. (Basic Supply and Demand) By raising minimum wage we make more people able to buy, and more people willing to spend, which in turn raises prices and causes inflation.
205209
It is hard to answer that question because there are many different ways to measure inflation.  A good resource is the NASA website, http://www1.jsc.nasa.gov/bu2/inflate.html.  Additionally, the U.S. Department Of Labor, Bureau of Labor Statistics has a record of the Consumer Price Index, ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.\n\nAccording to the BLS, the CPI in January 1926 was 17.9 in January 2006 it was 198.3.  What that means is $17.90 eighty years ago is now worth $198.3 or $1 in 1926 is worth $11.08.
105870
Simple economics, if we get rid of the penny then inflation would take over. Which means higer prices on everything.
202430
Consumer Products prcies go up due to rise in inflation. Inflation is due to imbalance in demand and supply of factors of productions. Then the factors of production are insufficient to satisfy the demand then the prices starts rising as the functional result of demand law. High demand low supply rises the price. \n\nOn increase in prices all the consumer products are prices high to cover the cost of factor of production.
189358
It is a way of controlling inflation.  With low unemployment you have more people competing for goods and services which drives up prices.  Higher unemployment means there is less purchasing dollars out there which tends to stablize or lower prices.
473482
Similarities\n1. Prices will be high.\n2. Money Floatation will be high\n\nDifferences\n\n1. In Growth, production level and quality of goods also will increase, but in inflation production level and quality of goods remain the same but price will increase..\n\n2. Standard of living will increase in growth, it will be low at inflation periods..
504383
Decreasing interest rates can actually spur inflation rather than curb it. That is why the Fed keeps raising interest rates.
17052
These two links are quite comprehensive in their coverage of these terms. \n\nhttp://en.wikipedia.org/wiki/Inflation\nhttp://en.wikipedia.org/wiki/Deflation_%28economics%29
533025
The increase price of oil causes the costs of producing or shipping other products more expensive which cause inflation.  Therefore, the Fed has to raise interest rate to fight inflation.\nYou are correct, more people will be able to buy homes if the interest rate is low because they can afford more.
677839
cause - no money\neffect - less money because of loss of job\n\nWhat Caused the Great Depression?\n\nThere are several explanations for what happened but the most obvious conclusion is that it was the confluence of several shortsighted and commiserating factors. Three main themes emerge: historical factors, central bank policies, and political decision making. For the purposes of this discussion the focus will be on the United States.\n\n \n\nThe US in the 1920's: Buying into the Boom\n\n \n\nThe 1929 stock market crash marked the beginning of the Depression. Prior to the crash the stock market had been an important source of funding for industry; thus the crash itself was a contributing factor to the downturn as well as a harbinger of things to come. Since stock prices are based on estimates of future earnings potential, the stock market performance of the 1920's tells a story of runaway optimism for the future. When it peaked a few weeks before the crash, The Dow Jones had risen 597% over the previous 8 years. It was soon to become a symbol of runaway pessimism.\n\nThe freeing of capital from government use to commercial use following World War I caused commodity prices to inflate. In 1920, Ben Strong of the US Federal Reserve Bank of New York raised interest rates sharply to prevent inflation. This caused a recession and the stock market to fall. Once hard assets like commodities and real estate were no longer rising in price, money began to pour into stocks and bonds. The Dow started climbing from its low at 63.90 in 1921 and rose 150% over the four years to 1925. \n\n \n\nAccording to Ron Chernow, in "The House of Morgan", It was in 1925 that Ben Strong made a secret commitment to Montague Norman, Governor of the Bank of England, to help England reinstate the Gold Standard. This action would later be shown to have undermined the British economy but the Pound had been the main medium of international exchange at that time and it was felt to be in everyone's interest to have it be exchangeable for gold. With moral support from the US Treasury, Strong chose to help strengthen the value of the Pound by depressing US interest rates. This depressed the value of the US Dollar and caused the already robust economy to boom. \n\nIt was suddenly cheaper to borrow money to invest in the stock market (called margin investing). Since the Dow had risen steadily since 1921, "small investors leapt giddily into the stock market in large numbers". The margin requirement at that time was only 10%, meaning you could buy $10,000 worth of stock with only $1,000 down, borrowing the rest. With artificially low interest rates and a booming economy people and companies were more apt than ever to invest in grandiose business expansions and over-priced stocks. Mergers and acquisitions soared. \n\nIn 1927, Britain ran into trouble with its gold standard again and Ben Strong lowered US interest rates in sympathy for a second time. This ignited the boom into the speculative frenzy that brought the market to its peak on September 3, 1929. It was like pouring gasoline onto a fire - the flames rose up, no lasting fuel was added, but the economy sure looked great. \n\nBen Strong died in October 1928. George Harrison, his successor immediately lobbied for higher interest rates to cool the speculative fervor. Rates were finally raised 1% in August of 1929, but by then it was way too late. The Dow peaked at 381.17. \n\nThe market and the economy had buoyed itself from one source of hope to the next for a whole decade. First it was the end of war-related inflation and booming exports for war reparations, next artificially low interest rates in 1925 and 1927 and booming exports due to a reduced value of the Dollar vs. the Pound. There were major tax reductions instituted by the Republicans under Hoover and finally in June of 1929 an international accord was struck with the Germans (albeit short-lived) over the financing of war rep
688950
the short answer is inflation . when inflation is high the fed will raise the interest rate to combat and try to slow down inflation .
1142697
Printing more money causes inflation.  The more money there is in the economy for the same number of goods, the greater the cost of each good.  \n\nInterest rates are a combination of the inflation rate and the "real" interest rate (that discounted for inflation).  If inflation increases, the interest rate goes up.  The government pays its debt with interest.  As such, it just got a lot more costly to pay off the debt.\n\nSo ... if a lot of money is printed, we get all of the negatives associated with inflation and the devaluation of the currency, plus it will cost a lot more to pay off the debt.
785998
False.  Inflation decreases your purchasing power.  And it also decreases the value of your debt.
622944
Why because if the government just printed more money then inflation would occur and it would cost 10 million dollars to buy bread.  Check out what happened to Germany during WWII.
527762
If prices rise unexpectedly, consumers will update their expectations about future inflation. Any decrease in unemployment from inflationary money policy will only be temporary, but higher inflation will be permanent. Authorities (the Federal Reserve in our case) can assure the markets by issuing statements that they will not pursue inflationary money policy (like increasing the money supply). Over many years, if the Fed has made good on those statements, the market will think that those statements are credible. The cost of maintaining this trust is the loss of control over the short-term economy.
39812
Inflation is worse here. In Europe they are actually reversing inflation.