Inflation Essay Example | Topics and Well Written Essays - 1500 words - 1

Inflation - Essay ExampleThere ar different reasons that contribute to pretentiousness in any economy which varies in terms of supply and study of commodities in supply and the intend of exchange (Baumol & Blinder, 2011, p 37). According to economists, moderate or low economic inflation can be ca utilise by the increase in demand of commodities or the scarcity on the side of suppliers. On the different hand, hyperinflation is attributed to towering supply of currency in the market in which the individual who possesses it buys commodities at high prices than they ought to embody under normal circumstances. This has ever been witnessed in different countries where currencies have inflated to trigger an economic affright to the businesses within the society. In attempts to curb the inflation from rising to hyperinflation, mingled methods have been implemented which have light-emitting diode to stabilisation of the economy and improve the predictability of the market conditions . In United Kingdom, UK inflation happened and the country implemented various methods that led to balancing of the economy so that investors could continue to invest in that economy. In looking at the effects of inflation, it is good to consider the various things that lead to it and means that can be used to visualize it with a practical example of a country that has ever been affected and implemented some methods they used to control it with a focus at the advantages and disadvantages of those methods. In the economy, there atomic number 18 different explanations that economists give as the pee-pees of the economic inflation that affect nation these are given according to the different types of inflation that are found within an area. In general, the general causes of inflation plays around supply and demand of various things in the market that have direct influence of on the prices of the commodity to be bought. This means that abundance or scarcity of a particular determinan t of trade i.e. goods or services and means of exchange, can cause prices of the commodities to rise within a short period. Following this perception, the abundance on the side of demand causes prices to go high because of the competition that arise from the different buyers who are interested in a particular commodity. The other perspective that causes inflation is the scarcity on the side of the supply where only little products over which buyers argue to attain making the sellers to determine the buyer through high prices that are attainable by honorable a few of them. From this perspective, there are two major categorisation of inflation in the economy, which are dependent on supply and demand in the market where individuals trade and which include moderate and high rate or hyperinflation (Credan, 2006, p45). Moderate inflation is caused by different situation of the demand and supply of the products in the market and can result from increase in the demand for products or redu ction of supply. As a result of increased demand for goods or services, many customers that require a particular product cope for it financially and can lead to high prices of such products as in accordance to the law of demand that says that the higher the demand, the lower the supply and hence, the higher the price of the commodity. This results to inflation because