What are causes for inflation ?
- 23 Answers
- 59146 Views
- College School Exams Tests, Gayatri, Reliance, Satyam, I also Faced
- E-Mail Answers
Answer Posted / shilpi agarwal
• Inflation may also result form an increase in the
costs of production. This leads to an escalation in the
price of the final finished products. This situation arises
when there is an increase in the prices of the raw
materials. Rise in the costs of labor may also contribute
to inflation. This is because the increase in the wages of
the labors will make the companies to increase the cost of
their products and extract the additional amount spent as
wages from the consumers.
• Inflation may occur if the government of a country
prints money in excess that what is actually required, to
deal with financial emergencies. This results in the
escalation of the prices with rapidity, to keep pace with
the currency surplus. This situation is known as the Demand-
Pull, which is characterized by forceful escalation of the
prices, owing to a higher demand.
• Inflation may also occur when federal taxes are
imposed on consumer goods like fuels or cigarettes. With
the rise in the taxes, it is the common trend of the
suppliers to forward the additional expenses to the
customers in the form of hike in the prices of different
products.
• The national debts and international lending may
also lead to inflation. The countries at the time of
borrowing money, need to pay interests. The payment of
interests makes the nations increase the overall prices of
commodities, to keep up with their debt repayment programs.
• A serious fall in the exchange rate may also be
cited as a cause of inflation. This is due to the fact that
the government has to deal with the differences in the
levels of the country's imports and exports
| Is This Answer Correct ? | 82 Yes | 15 No |
Post New Answer View All Answers
Please send me last 5 year solved question papers of Canara Bank as well as Bank of Baroda to my e mail id
Chola's local-government had assemblies of
Can anybody tell me how to prepare for the interview of SSC Scientific assistants
i am appearing an examination of assistant inspector of excise and the matter of fact is, i have no clue. can anyone help me out with likely questions?????
