Inflation In The Goods And Services Of The Economy Of A Country

Inflation in the goods and services of the economy of a country

Introduction

This essay starts from inflation, since it is a general increase in the prices of the goods and services of an economy for a period of time, when we hear that there has been inflation means that prices have risen or inflated, hence their name. This is measured by GDP (it is when the price variation of all goods and services produced in a country) is taken into account, it can occur loss of the currency, there are people who are responsible for maintaining low inflation, this is themonetary authorities of the country. There is a devaluation (increase) generated by inflation in different countries.

Developing

This occurs in almost all countries, banks always try to make some inflation in their country and that this is between two and three percent. Because if there were no inflation, prices would go down and deflation would occur, which is what they do not want to occur in a country, one of the prices functions is that they allow buyers to decide the type and amount of product they want to acquire, these also allow it to guarantee that resources are distributed efficiently in order to generate a balance in it merchandise. An important aspect is that if prices raise salaries too, but if prices and salaries rise our debts remain the same, but the increase in prices also causes people to prefer to consume now instead of later because then theprices will be more expensive. How is inflation calculated?: This is calculated by the Consumer Price Index (CPI), which is composed of groups of goods and services, from food, clothing, medicines to communications, transport and housing.

The DANE: Measures income and expenses, if inflation in this case increased the amount demanded people and for companies would not generate so much money from people.

Types of inflation

• Stanflation: It occurs when there is inflation and also decrease in GDP.
• Underlying inflation: It is that price increase that excludes energy products.
• Deflation: This is negative inflation, when prices, instead of climbing, go down.

According to the order of the percentages:

• Moderate inflation: how much price increase does not reach 10% per year.
• Galloping inflation: it occurs in the case that excessive inflations (exaggerated) exist. We are even talking about two and three digits.
• Hyperinflation: They are price increases that exceed 1000% in a year. They cause serious economic crises, such as what is currently happening in Venezuela, affecting the country’s economic crisis.

conclusion

In conclusion, inflation has advantages and disadvantages that may or may not help people, thus understanding that a country needs inflation to generate expenses or either to reduce them, it is also very important that there are people or groups that are able to measure, calculateor stop inflation and its different types, this in my opinion helps that people do not make excessive purchases and can control their expenses, inflation serves to control the various prices of the products and the percentage they can reach in a period of time, it is important to reduce inflation so that low -income people can acquire their products, they necessarily talk about low -income people also other people reducing inflation would be reduced at the same time their expenses and would have the opportunity to acquire other products.