Friday, March 13, 2009

causes of inflation

inflation has many causes and economists often disagree as to which are the more important at any one time in aparticular country .however ,three main causes can be outlined :
1- demand-pull inflation ,where buyers bid up the prices of goods and services .
2- cost-push inflation ,where sellers have to increase prices because their costs -wages ,raw materials and fuel (especially oil)-have risen.
3- structural inflation,where acountry is wage bargaining and price determination are so organized that an easy solution to problems is to raise prices.

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