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Inflation

What's the main cause of inflation going high ?

Inflation hits a 40 year new high. After 1982, this year it has reached higher then 9.0%. It does not only include the fuel prices but it also consists of food prices and shelter prices too.

What’s the main cause of inflation going high ?

There are many things that causes inflation, but two main reasons are demand-pull and cost-push. These two things are responsible for the prices going high in an economy. Demand pull condition happens when the demand from the consumers go up. The reason for this can be the growing population in a country. Cost-push condition happens when supply costs forces prices to go high. This usually happens due to an increase in fuel prices and the relative product supplies.

How it can be Controlled?

The Governments usually control it by reducing the prices or increasing salary cap. They can control it giving discounts on basic things like grocery items of daily use. Governments can also pursue a contractionary monetary policy, reducing the money supply within an economy.

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