Friday, 29 May 2015

Inflation.

Inflation means an increase in purchasing power in relation to goods available for purchase. It causes artificial rise in prices and increase in issue of paper money. The major cause for the artificial price-hike is the phenomental increase in population. The production of goods is expanding slowly. The consumption of goods increases as a result of population growth. It accentuates inflation. The black-marketeers create artificial shortage of goods by stockpiling the necessary items during festive occasions. Their profit gap widens because the demand of goods is in excess of their supply, profit earners, businessmen, merchants and manufactures benefit the most during inflation. 
The government can check inflation by raiding the hoarders and by opening fair price shops, rationing of provisions, distributing the shortage in an egalitarian manner, seizing hoards and penalizing corrupt officers. 

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