Question

Write as much as you know about Inflation rates from finance. What it is, what does it do, why is it important?

Answer 1

Answer - Inflation can be studied as the rise in the general price level in the economy . It arises because of the condition of excess demand in the economy. The value of money decreases as the result of the inflation. It makes the exports very cheap for the nation and the imports very expensive which leads to greater outflows and reduces the value of the currency in foreign market. Inflation at the stable rate is important for the economic point of view to keep the supply and demand stable in the economy. But the very high rate of inflation make it difficult for the lower income group to earn the high cost of their living