Anonymous asked in Business & FinanceOther - Business & Finance · 1 decade ago

What causes inflation?

5 Answers

  • 1 decade ago
    Favorite Answer

    Inflation in Economics is the state of price increasing without normal reasons.

    (1) People is taking longer time to study before going to work, so labor's productivity is increasing. So price level of goods should decrease.

    (2) Land use is more effective. One acre of land can produce more corns than before. So Land is not the cause.

    (3) Capital is becoming more efficient. One can move capital freely between states and states within the U.S.A. One can move capital globally in a touch of your computer mouse. So capital is not the cause.

    There are three factors in economics. So the inflation is just a manufactured number without much meaning.

    Or some even claim that the inflation is caused by over-printing of money by the governments.

    I am not sure which of the above two are real. But I believe one of them might be true.

  • ?
    Lv 7
    1 decade ago

    Air Compressor. I have a nice one to inflate tires around the house.

    Interest Rates can cause inflation.

  • 1 decade ago

    When the government prints more money....

    This causes inflation because the value of the money decreases which, in turn, increases prices.

  • 1 decade ago

    Quanity and cost. if the quanity goes down the cost up and if the quanity goes up the cost goes down

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  • 1 decade ago

    supply and demand

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