Inflation is Terrible for the Economy
Good morning. Did you know that prices for goods are rising continuously? The website, people history, has shown that in 1930 the price for a loaf of bread was 9¢. In 2008 the prices have risen over 2$.This is also known as inflation. By definition, inflation is a general increase in prices for goods you buy regularly. When an economy is in an inflationary period many significant items such as houses, foods, and the price of gas continue to rise. Many families are struggling so much they must borrow money from their children to be able to pay for their daily expenses. This fact makes it very difficult for families who live near or below the poverty line. As a result, inflation is terrible for the economy.
Inflation can be manageable for families whose income can keep pace. However, if a family’s income increases only 2% in one year and inflation increases by 4% then the family will be losing more money each year. The longer this continues, the harder it will be for families to save for their future as they will be spending more money each year. My family would love to purchase a cottage but because of inflation they are not able to. My father regrets not buying a cottage ten years ago because the current price of the cottage he almost bought is now double the price. I begged him a million times this year and he would just reply “it’s too much.” The most obvious examples of inflation are the prices for food, gas and houses which almost every family would experience daily. The constant inflation issue will potentially increase the number of lower income families. Currently, our country needs to manage inflation in a reasonable way. Economists believe that inflation is caused by a higher demand for goods than what can be supplied. For example, if the demand for apples increases, the price for them must increase as well to an amount which reflects the lack of supply.
Unfortunately, there is only so much the government can...
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