Inflation is
defined as an increase in the price of bunch of Goods and services that
projects the Indian economy. An increase in inflation figures occurs when there
is an increase in the average level of prices in Goods and services. Inflation
happens when there are less Goods and more buyers, this will result in increase
in the price of Goods, since there is more demand and less supply of the goods.
Inflation causes increase of Interest
- The
Supply of money goes up
- The
Supply of Goods goes down
- Demand
for money goes down
- Demand
for goods goes up
Our Indian
government gets involved in it to control the inflation by adjusting the level
of money in our economical system. The most noticeable way to increase the
money flow in the system is to print more currency, then the rupees will become
more relative to goods.
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