An Effect On Economic Activities Economics Essay

An Effect On Economic Activities Economics Essay As a increase in general price level and therefore a fall in the value of money inflation is a normal level of prices of goods and services lack of time. inflation is use to to refer to a raise in the price of normal level as a goods and services,it affects some specific goods and services as in commodities inflation its increase journal level of time. the major type of inflation is inflation affecting a common man, because of this create a problem due to inflation. when the supply supply and demand goes out of control ,consumer should change their buying habits for manufacture to short production in 2007 in USA could best illustrate the effects of inflation housing prices demand is increase continuously from 2002 onword,it comes result in a dramatic decrease in demand. Inflation will be clear a major problem in economy if the demand is increases bt supply of goods is constant, because if there is a lot of customer but very few suppliers then supplier can’t do anything, becau se the income is increase but deliver of the goods is constant, in market place the producer would not be able to control the cost of raw material and labor also. if this is happen it result comes with less profit or in some extreme case no profit ,it should come to out of business, the manufacture would not have an incentive to invest in new equipment and lack of technology. Uncertainty force people to withdraw money from the bank and change it into product with bigger lasting value like gold.the inflation causes lead the country lower economic growth, from the year 1950-1960 the average was at 2.00% inflation, between 1960-1970 the average was 7.2%,in 1970-1980 the average was 8.5%.there are lots of monetary measures like credit control, demonetization of currency, issue of new currency, reduction in unnecessary expenditure,increae in taxes, increase in savings ,surplus budgets, public debt. these are the monetary measures. There ae some fiscal measures like,to increase production ,rational wage policy,prie control,rationing.there are so many tyes of economic crises ,in economy there is a inflation affected to Indian economy so when the global food trade systems stop delivering and the meager pay the price,for several years the global trade in tack foods has been heading towards a catastroph CAUSES:- In Indian economy the inflation have been bombarded comment, the causes of inflation is demand for goods, the economy us can make the largest contribution to prosperity and political stability by restoring the helth of the us t,in inflation income is increase bt no supply is increase because of lack of transperncy in inflation.so supplier cant give the satisfaction of goods,so mainly this is called inflation. There are so many factor influencing the inflation,the inflation import raises ,in the inflation rise in the labour cost ,it also effect indiscriminate lending by fund flush banks ,there are co-relation between inflation and gold price,people like marc Faber are habitually on air and cyber waves ,tout the idea that since central banks are inflating money supply. to investment in gold to defend yourself against inflation. we are already known that everybody is thinking the similar things and performing, in the same behavior, rationalizations are but excuse for all types of insanity but even so how strong is the affiliation between gold and inflation anyway hedge against inflation. one can make a commonsense case level that gold is a play against inflation due to partial supply, that is indeed the main basis of the squabble of many people in the financial. but we at fore trader decide to do away with groundless assumption for moment. By collecting the data cross-correlation between oil,gold,and inflation over a 30 years time, starting in 1980,and triumph to our day,the some of people surprising conclusion.