Quote from: cafee_orange on May 05, 2023, 07:42:34 PM

The amount of money in circulation continues to increase will cause inflation in a country, this will have an impact on prices which will also continue to rise. If the amount of money in circulation doubles, prices will also double. An increase in the amount of money in circulation can occur, for example, if the government uses a deficit budget system.

There are many factors that cause inflation, not only the excessive printing of money but there are also other factors caused by supply that trigger an increase in the bid price of an item, including goods that must be imported into a country. as well as the prices of goods controlled by the government such as the increase in the price of domestic fuel oil, the increase in world oil prices and the increase in the basic electricity tariff. Supply activity has a very significant impact on inflation in a country or even the world.

Apart from this, the continuous increase in production costs over an uncertain period of time can also trigger inflation in a country. But in simple terms, the impact that directly occurs is on the supply of goods. In addition to other causes, inflation is caused by increased demand and increased supply. a situation where supply and demand are unbalanced or demand for goods and services increases. This is what causes production factors and the availability of goods to experience a downturn and substitute goods to be reduced, limited or eliminated. This moment is usually used by sellers to increase the price of goods drastically causing inflation.

Tervelatuk

Posts

Merits