The Effect Of Inflation In Our Municipality

The effect of inflation in our municipality

In the following essay, try to focus on the subject of inflation, in order to have more clarity that knowledge and everything that is necessary to know about it.

It will clearly be explained what the types, causes and consequences of inflation are.

As we know inflation is the increase in market prices level for a period of time, that is, the general level of prices increases. There are also some types of inflation in which we have: deflation, deflation, reflation, stagflation, underlying inflation it is necessary to know what each of these types are trying to understand with better clarity that is inflation and that it treats.

Deflation is the decrease in prices, that is, the opposite of inflation, but still remains a type of inflation. Disinflation is the descent in the inflation rate, that is, prices rise, but less than before. Reflation is the attempt to increase inflation against deflationary pressures. Standing can occur in times of economic crises and leads to increase inflation and unemployment while there is a stagnation of GDP. And finally we have the underlying inflation is an indicator that shows the variability of the most precise short -term consumption prices since it does not include energy prices, nor the unprocessed elements.

We must take into account that we are talking about a general increase that certain products have been more expensive. The increase must be global for inflation to occur.

There are several causes that can cause inflation. The comments are: demand inflation, cost inflation, self-constructed inflation, monetary inflation. But we will also find some types of inflation depending on their amount, such as moderate inflation, galloping inflation, hyperinflation.

The main consequence of inflation is the loss of purchasing power, which means that with the same amount of money less goods and services can be acquired because its price has risen. This affects both companies and individuals;To companies because with prices instability they lose their logical decision -making patterns, with which the market slows down, and individuals because with the same income they have to deal with very high payments and how it is known if it is known ifPrices will continue to rise so many people tend to monopolize essential products such as caution of future increases.

Now if we relate inflation to our municipality, it would bring many consequences since our municipality is not one of those who have more monetary wealth, the most harmed by inflation are undoubtedly people who have the lower resources since these to meet the needs must acquire thenecessary goods and services, but with the same income they obtain they have to face very high payments but having the same income, and as I said previously our municipality has a very high index of poverty so having inflation it will be very difficultFor these people to meet their needs, but normally who belongs to segments of greater wealth has investments or income that serves to alleviate the effects of an adverse economic situation.

To conclude the issue of inflation in our municipality, it affects everyone, but most are low -income people, if people have to meet the needs with our same income and the same goods and services, but with very high costs, that is,that inflation would seriously affect our municipality.