Inflation And Its Relationship With The Economy Of A Country

Inflation and its relationship with the economy of a country

Introduction

Inflation is the increase in market prices level (consumption) for a certain time. It can have certain effects that are both positive and negative, for example, that the value of the currency varys over time, the shortage of goods due to price increase, people will not be able to save, since they must invest more to acquire The indispensable assets to subsist and it is possible that low -income families are more affected because their capital is not enough to make the income required to obtain the necessary goods. Therefore we can conclude that mostly the effects of inflation are negative, that is why certain measures should be taken to prevent this from happening and affecting the economy of a country, some examples of what can be done to avoid inflation They are the following: The Government must seek a way that the demand for goods and their production is the same in this way there will be a balance in the economy and the situation of many families will improve the nation as such, the key It is trying to maintain a balance to be a developed country, the government must try not Promote production, however the demand for money or production must grow together with the offer otherwise this would generate inflation, they should try to reduce production costs, which causes The final price of the product is lower and in this way there will be more demand for the product decreasing inflation, the government should have certain measures, certain prevention against inflation, since this is very unpredictable because the prices of the products do not rise All at the same time and it is impossible to identify the exact date of when the inflation rate will increase however if the government is prevented when this may happen, for example, certain aid campaigns to the communities of low resources so that the situation of all these families Not worsening this scarcity, famines and so many economic problems produced by inflation, will never be known when this will occur, however, it is not a bad idea to adopt certain prevention measures against this.

Developing

Inflation has many causes such as production costs increase this that the final price of the product is greater having a negative impact on the economy of families, another cause is that the government has a fiscal deficit, and That causes it to be indebted, it also occurs because the demand for goods is greater than the supply of these, certain consequences of inflation must be mentioned to be more aware of how it could affect us especially in our interest rate, when it occurs Inflation affects our income and savings, since we must invest more to achieve the necessary goods, it affects our economy by becoming in an unstable people because there is a bad economic situation, it also affects the value of the currency, since it makes it through This time varying and loses its real value, there is a shortage of goods, since people will reduce their shopping list, since because of their income they cannot Acquire them all and their lifestyle will get worse as long as inflation is not controlled or stopped.

The Government must be attentive to these types of problems, which greatly affect the development of a country, because if there is an economic balance, its investments may be greater, thus improving the stability and quality of life of the people than people than people who They belong to this country.

conclusion

In conclusion, inflation has a very negative impact mostly for the economy, the development of a country, the situation of families, in general affects the country with such in all their senses.