In short, inflation occurs when the economy is growing due to the increased spending. In case it ever happens, the prices are getting higher and the currency is worth less that usually. This leads to the fact that the currency can buy less than it would before. When this or that country faces with the inflation, the government is required to take a range of actions to stabilize the economy of the land.
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The Effects of Inflation Essay - Free Argumentative Essays For Students
While the price of goods increases, the value of money goes down significantly causing the inflation effect. Therefore, inflation demonstrate, a reduction in the purchasing power per unit of money. Inflation can be categorized into various categories according to the rate of price rise of goods. This type. Inflation in Iraq As reported by D.
Essays on Inflation
The occurrence of grade inflation is affecting the quality of education throughout the system. A lot of students, at every level of education, are promoted to higher grades even though they are unqualified for that grade. Grade inflation is quite similar to the concept of economic inflation in which price of commodities rise leading to fall in the value of money or real purchasing power. It impacts the standard of education in a similar way. Several studies have been made in this regard to confirm that grade inflation is a reality and it is sad to note that this problem is continuously increasing as compared to the previous years.
It affects the distribution of real income, people on fixed incomes suffer as the purchasing power of their incomes decrease as price levels rise. Secondly, purchasing power od households on fixed income decline, as inflation tends to result in more unequal distribution of income as those on lower incomes find their wages do not rise as quickly as those on higher incomes. In times of high inflation household tend to purchase real assets that retain their real value since their prices rise faster than the inflation rate. Finally, another negative impact is the income tax earners suffer from fiscal drag pay rises to combat inflation put them into higher marginal tax brackets. Wealthy people have a higher income and consequently spend less of each marginal dollar, which caused the economic growth to slow.