What is inflation? Also, what are the causes and what are the advantages & disadvantages?
152394
the main cause of inflation is the government increasing the supply of money. But it is a little more complicated than that.  When the price of oil increases, the costs of everything that depend on oil also increase, for example. That then causes an increase in prices charged to workers. Workers then demand increased wages to maintain their standard of living. Employers give them higher wages without too much fuss because they know that they can pass the increased costs on to consumers.  The government facilitates all of this by printing more money. The government loves inflation because they borrow a lot of money at fixed interest rates. If they can cause the value of the dollar, peso, pound, euro, or whatever to decline they do not have to pay back all of what they borrowed. A neat trick and used successfully by all governments. Inflation also increases tax revenue.  If a person buys a share of stock for $100 and ten years later sells it for $200, he has to pay taxes on $100.  But if the inflaction rate is 4%, he actually made only $52. So the government makes out like a bandit again. The same goes for all borrowers.  \n\nOn the other hand those who lend money are loosers. Consequently, inflation tends to dry up the sources of capital. It is better to spend your money than to save it. Hence, that is why people have not been saving money since 1999, because Greenspan reduced the interest rate to 0. People are not as stupid as the government is.
438298
I'm sure an Econ person is way more qualified than I to answer this question but it deals with supply and demand.\n\nThe cost of lending money (as in rising interest rates) makes less people borrow it which means that there will be less people buying goods and services which keeps inflation in check.\n\nThe more it costs banks to lend money by borrowing from the federal reserve, the more they have to charge people who take out loans to recoup that costs.  This means that the price point for borrowing money is higher meaning less people will borrow money because they have to pay back more.\n\nIn the grand scheme of things, this makes business keep their prices in check and not raise them as high as they would like.
604471
politics situation, inflation rate, lack of demand.
652238
i m not sure, but i think inflation tax is a percentage of the additional inflation that has taken place in a country, and it is paid by the home country to world organizations, such as world bank, or WTO.\n\npls, my answer is jst an assumption, so do not rely on my answer fully!
74344
They are deflationary to combat inflation
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.
757922
A high inflation rate lowers the value of the dollar.  More foreigners by U.S. goods and less Americans buy foreign goods.  \n\nAmericans making a fixed wage can not purchase as many goods with inflation as they could previously.
645558
We are experiencing relatively high levels of inflation. That is why our dollars are losing value in comparison. But you should remember that this makes American goods more expensive, which will decrease net exports....this should make some conservatives happy (those who argue that we have a negative trade balance with countries like China). Anyway, this is not necessarily a bad situation, it just depends on how you view it on the political spectrum. Oh, P.S. I am a conservative also, I just read what I wrote and realized that it came across wrong. No offense
296113
Here is a table I prepared for you:\n\nyear | inflation\n  \n1955  |    -0.4\n1956  |    1.5\n1957  |    3.3\n1958  |    2.8\n1959  |    0.7\n1960  |    1.7\n1961  |    1\n1962  |    1\n1963  |    1.3\n1964  |    1.3\n1965  |    1.6\n1966  |    2.9\n1967  |    3.1\n1968  |    4.2\n1969  |    5.5\n1970  |    5.7\n1971  |    4.4\n1972  |    3.2\n1973  |    6.2\n1974  |    11\n1975  |    9.1\n1976  |    5.8\n1977  |    6.5\n1978  |    7.6\n1979  |    11.3\n1980  |    13.5\n1981  |    10.3\n1982  |    6.2\n1983  |    3.2\n1984  |    4.3\n1985  |    3.6\n1986  |    1.9\n1987  |    3.6\n1988  |    4.1\n1989  |    4.8\n1990  |    5.4\n1991  |    4.2\n1992  |    3\n1993  |    3\n1994  |    2.6\n1995  |    2.8\n1996  |    2.9\n1997  |    2.3\n1998  |    1.6\n1999  |    2.2\n2000  |    3.4\n2001  |    2.8\n2002  |    1.6\n2003  |    2.3\n2004  |    2.7\n2005  |    3.4
615817
There is not any "Inflation Tax". Inflation is a condition of ecconomic cultures. Let me use the U.S ecconomy as an example. Here we have dollars. We are suppose to have gold reserves which backs each dollar we have circulating in society. However, as we spend money we do not have the gold rererves diminsih, which then in turn devalues the dollars it is suppose to represent. For each paper dollar we are suppose to have an equal amount of gold to cover its worth. What happens is we spend that god elsewhere and do not take out the corresponding dollars circulating in our society. When this occurrs we now have more paper money than we have gold to cover them. This devalues our money. We have to make up for this some how, it is impossible to have something that does not exist.\n\nSo, we then have dollars which are not as valuable as when we had the gold to cover them. Paper money, by itself is wothless. It is simply a peice of paper we put ink writing and pictures on to represent the gold our government and therefor we own. \n\nWe use to use gold, silver, nickle and copper as forms of currency. Our government decided all this material were just to heavy and cumbersome for us to carry around. So, our government took the Gold and in exchange gave out paper money to represent that gold to those who turned it in. We supposedly kept using silver, nickle and copper as silver dollars, dimes, nickles, and pennies. \n\nOver time the silver was also taken and exchanged for coins with less and less ore content. Today these coins are made of materials which are as valueless as paper. \n\nThe government used the gold and other ores in ways it shouldn't have. The government continues to put out more paper money which does not have any gold or silver to back it up. This continues to devalue our money. \n\nThis devaluation is a large part of inflation. As the money devalues, it can be used to purchase less and less. This is called inflation. It takes more and more money to buy the exact same things. So, the government then raises wages in order to provide more "money" for citizesn. Purchasing power. So, as the dollar value decreases and its spending power decreases wages increase. We are not really earning more, we are just trying to keep up with the value of the paper dollar. \n\nThere are other factors which play into this as well. Interest rates, etc. However, this is the basic reason for inflation. Yes, if we were to take all the paper money and turn it in to the government there would not be enough gold and silver reserves to give us back our real wealth. \n\nScarey isn't it? It is a game our government and other goverments are playing with our very lives and ability to provide for ourselves and our families at stake.\n\nHaven't you heard of countries where it costs like hundreds of paper bills to buy a loaf of bread? Very scary stuff. \nAlso, other countries are doing this too. When we exchange our money for another countries money we either get more of theirs or less of theirs in exchange for ours. In england we get less, in candada we get more, in Mexico we get way more. It is the Gold which determines how much a paper currency is worth.
932214
I think you're asking about something scientists call "cosmological inflation." Basically, inflation theory says that immediately after the Big Bang, when the universe was about the size of a pea, it expanded faster than the speed of light until it was about the size of a grapefruit. At that time inflation ended and 'normal' expansion proceeded. This faster-than-light expansion is possible because it was space ONLY that expanded at that velocity and relativity in no way prohibits this.\n\nThe actual mechanism that caused inflation is extremely complex and deals with such ungainly topics as scalar fields and quantum physics. Essentially though, inflation is thought to have happened due to the separation of the four fundamental forces of nature -- electromagnetism, strong nuclear force, weak nuclear force, and gravity.
511338
Inflation, my dear!! \nThat's what happens after wars.  Wars stave off a dying economy, and our dear president has set up his successor for a nice drop in economy.  Savings are at an all-time low- people are not ready for the depression that is coming,a nd it is sad.  Save the best you can, you will probably need it.\nClick the link below for a detailed answer &#92;/&#92;/&#92;/&#92;/
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..
1016272
This is the only info I could find.\n\nhttp://gradeinflation.com/
756593
Recession is the opposite of inflation. When recession happens, expansionary policy takes place. Meaning, government spending decreases and taxes increase.
269409
Government spending puts more money in the economy . . . but tht doesn't NECESSARILY have an eefect on inflation.  Government BORROWING (i.e. deficit spending) does create inflationary pressures.
1140485
It would take a whole course to give you a comprehensive response. You might consider signing up for one at a local college.\n\nMeanwhile, in a nutshell, here's what's happening at this time in the economy: The Fed is always concerned with keeping economic growth at an acceptably high level and keeping the rate of price inflation at an acceptably low level.\n\nWhen the economy gets cooking, the money supply expands (that's actually what inflation is). The business community spends more to satisfy their higher level of business activity, and consumers feel rich so they spend more.\n\nThe US economy has been on a five-year expansion. It's reaching the level where inflation is becoming a serious problem. So the Fed has been raising interest rates to try to keep growth from getting too fast. But consumers have borrowed huge, huge amounts, including in mortgages, so if the Fed "slams on the brakes" too hard by raising interest rates too much, the risk is that a severe recession or worse could set in, triggered by that mountain of debt.\n\nMeanwhile, other economies, especially China and India, have been growing at very high rates. They are gobbling up all of the commodities they can find - oil and gas, lumber, base metals, etc. That adds to inflation.\n\nWe are in the midst of a commodities boom. Mining and energy stocks have come a long way up but have a long way still to go. Many companies have done poorly for several years because they don't operate well in a higher-inflation environment (their costs go up faster than they can raise prices).\n\nThat's a lot of information in one short message. As I said, look into taking an economics course. I was a chemist once, but enrolled in business school and loved every minute of it because of the fascinating and useful things I learned.\n\nBest of success.