Custom essay writing services

Saving students' time, nerves,
and grades since 2004...
Print   Bookmark & share   CommentNeWavEssays » Services » Custom essay writing » Samples » Inflation

Inflation sample essay

prices for custom essaysanswers to frequently asked questionsbuy custom essay now

Inflation is an inevitable property of any economy in the world. In simple words, inflation is the rise of general level of prices. However, inflation is a much more complex phenomenon than simply the increase of prices. Inflation (or general inflation) is also identified with the fall of market value of money within a particular economic system. However, some economists prefer to use the term inflation to describe a rapid increase in money supply in a single economy. Generally, this is the main cause of the increase of prices. “There is no opinion better established, though it is seldom consistently maintained, than that the general scale of prices existing in every country, is determined by the amount of money which circulates in it,” wrote Thomas Joplin in his writing Views on the Subject of corn and Currency in 1826. Later in the paper I will use the term inflation to refer to increase of prices, and not the increase in money supply (unless specified otherwise).

The first reaction to the term inflation is in most cases negative, however inflation is an indicator of a healthy economy. Generally, mild inflation is a natural phenomenon of any economy, no matter how strong and stable it may be. Some economists say that small steady inflation is “greasing the wheels of commerce.” One of positive effects of mild inflation in a separate economy is that it is easier to adjust some relative prices (for example salaries). Renegotiating these prices downward is much more difficult. Moreover, some sectors might suffer immensely from constant price level because of so-called “sticky downward” prices that effect those sectors. So in an attempt to acquire zero inflation, employment and profits in such sectors would drop. In addition, stable prices and zero inflation rate might trigger deflation (general decrease in prices), which in turn would entail recession, bankruptcy, and can even entail depression.

The time value of money market expression is inseparable from inflation. From a particular point of view, inflation can be understood as a valid reason to invest money rather than save it. The value of accumulated wealth would gradually decrease because of inflation, which explains the expression above. Moreover, there is a degree of uncertainty regarding what the actual value of a particular currency would be in several years. Because of this uncertainty, investing is a correct activity.

While moderate and mild inflation is considered an indicator of healthy economy, inflation above these mild levels is considered to have a negative impact. As the government increases the money supply, and therefore the taxes, people are willing to spend more money. With the growth of inflation, tax rates grow as well, and so people are even more willing to spend the money for two main reasons: to avoid paying taxes on holding currency, and to buy products before they increase in price. Hence, in such economic conditions the demand for various goods is rapidly growing, which naturally causes the rise of prices. This collection of phenomena reinforces inflation, increases the velocity of money, and it is referred to as the vicious circle. This process is very difficult to harness, and in vast majority of cases it leads to hyperinflation.

Below are some of the properties and consequences of high inflation rate and hyperinflation... As the prices go up, the value of money goes down, and the uncertainty increases. This increase discourages investments and savings, and encourages purchasing (which is only greasing the vicious circle). Unfair money redistribution will occur. Those people who earn money on fixed incomes will receive the same amount, which is actually worth less, while the ones on a more flexible incomes will keep in pace with inflation. This way, money will be redistributed from those on fixed incomes to those on flexible incomes. An example of a person on fixed income is a pensioner, and an example of a person on a flexible income is any entrepreneur or someone in commerce. The same way the wealth is redistributed from creditors to debtors (provided a fixed amount is lent). Often the government is in the role of a net debtor, and so some economists consider inflation can be viewed as inflation rate. Exchange rate with other countries will be greatly undermined by the misbalance of international trade, in case internal inflation rate is higher than abroad. Some less significant negative impacts include the real costs imposed by an attempt to hold as less cash a possible. These costs include driving expenses, depreciation, and other. In addition, some enterprises will have to update their documents, databases, and actual prices, which is costly. Generally, hyperinflation can get out of control, which would hurt nation’s economy very badly.

Some economists believe that inflation should be viewed as stealing the money from the citizens of a country by its government. In any case, government can quell the inflation rate unless it has gone too far. But if the government is procrastinating with immediate actions, justifying itself with “valid” reasons, this is with a 99 percent probability an indicator of stealing money. Of course, the government does no t intend to pay the money back. Moreover, there is absolutely no chance that someone can stop or fight this mass fraud. The reason for such a safe one-way borrowing is that government is the only entity that controls money. When government increases money supply, this new money has no value, but rather is “mere printed paper with no intrinsic exchange value” (Abelard, 2000).

Another way to look at inflation is that it is an increase of the quantity of money in relation to the trade of goods in a society. Inflation is a global phenomenon of the twentieth century, particularly the post World War II era.

Fortunately, inflation is a stoppable process unless it has gone too far. There exist several methods that can be implemented to stop inflation. The Federal Reserve of the United States influences inflation rates by implementing different monetary policies, and by setting bank interest rates. Generally, Central (or National) Banks all over the world fight inflation by decreasing money supply, and by setting high interest rates. In addition, governments can institute wage and price controls (referred to as income policies) to fight excessive inflation rates. However, this method has several negative outcomes; price control distorts the overall functioning of nation’s economy because it encourages decreases in products’ quality, shortages, etc.

In general, inflation is a natural phenomenon, which a healthy economic system must experience at all times. Zero inflation rate, as well as too high inflation rates, are, however, harmful to an economy. The main sign of inflation is the increase of prices, which is in the majority of cases caused by the increase in money supply. Government is the only entity that is responsible for inflation, and it can control inflation rates by imposing specific policies. When government does not impose them, it is involved in stealing money from its people.

Bibliography

1. Inflation. 2005. Wikipedia the free encyclopedia. Website: http://en.wikipedia.org/wiki/Inflation

2. Silkos, P. Inflation and Hyperinflation. 2000. Laurier Canadian Excellence. Website: http://info.wlu.ca/~wwwsbe/ faculty/psiklos/papers/oup.PDF

3. Money and Value. 2000. Abelard. Website: http://www.abelard.org/inflation.htm
prices for custom essaysanswers to frequently asked questionsbuy custom essay now

Order custom essay now!

Users have left 5 comments so far

(2011-07-14 13:12:24) permalinkEkam gill considers:
Very large , r u crazy , i have no time to read this !
(2011-07-10 09:24:26) permalinkrameez shaikh argues:
good, very good esay
(2011-07-03 20:56:41) permalinksahil writes:
i think it is the one of the best essay on inflation
(2010-05-18 00:30:51) permalinkfaculty argues:
It is very good essay. It helped me.  Thanks.
(2010-04-01 16:56:44) permalinkrufi wants everyone to know:
i think its perfect essay on inflation.. it gonna help me....
Comment on this page Your opinion matters! Simply leave a comment on this page and share your thoughts.
plain text, please Enlarge field
(spam filter)
 
List of samples
Food Journal AnalysisSkiing is not always glamorousMotivational Concepts: the WillDo I believe in Marriage?Currently Acceptable Accounting MethodsShakespeare’s ShylockKant and The Categorical ImperativeInterpersonal Skills: Project ManagementSuccess Factors for WWEThe way Non-Government Advertising shaped American Beliefs.Grades Aren’t Always Indicators of LearningRole of Liberty in RevolutionsA legendary person in the U.S. history between 1775-1974Using PDA’s in MedicineByzantine Art and ArchitectureSurrealism: Dream Caused by a Bee Flight by DaliRight or Privilege: Healthcare in the U.S.Intelligent Design vs. EvolutionObligations to SocietySecondary Data ReviewPantheon vs. ParthenonFamily and SchoolEconomic History of PortugalLearning: personal experienceStress Counseling in the Organization ContextPablo Picasso and Henri MatisseIndustry and Corporate RiskWhat is the Meaning of Life?Migration into the United StatesEconomies of Scale and the Great Merger WaveMental Facilities and The Treatment of Their PatientsExploring the essence of “THE AWAKENING”Porphyria's LoverA Raisin in the SunFreedom in the WorkplaceGovernment HistoryCase Study: Effective Management at FordLanguage Issues in the United StatesSociology ProjectWhy should we read?SHAKESPEARE IN FILMSCrime and Sanction- Do These Notions Hold in Our Present Day?Herbal Medication vs. Prescription MedicationMexican War and Civil WarSafe Injection SitesThe Trojan WomenLong Bonds vs. Short BondsLEGAL MAZE IN THE EUROPEAN UNIONLaw in American Healthcare SystemThe Importance of Ethics in SportDo Unto OthersWal-Mart: Internal AnalysisNiccolo Machiavelli's "The Prince"Victorian and Modern View of SexualityMel Gibson as Movie DirectorGentlemen’s AgreementInformation Technology: Software and HardwareEvolution of Greek SculptureWomen's Role in Patriarchal SocietiesThe Color Purple & Desiree’s BabyTreatment for DepressionN’Sync’s It’s Gonna Be MeGoal–settingFree Will vs. DeterminismNAVERSON AND STERBATelevision NewsSHAKESPEARE IN KUROSAWA’S FILMSOperations Management & ProductivityQuine’s View on SynonymyEnron Financial HealthEconomic TermsLanguages Spoken in Oakland Public SchoolsWhat are my greatest achievements?Roles of Family and SchoolNew Product DevelopmentIndividual and SocietyTragic Hero of M. ButterflyArnold SchwarzeneggerInflationIndustrial Revolution and ImmigrationDescribing a HeroApplication to USF“I Have a Dream” Critical OverviewLegal Driving for Illegal ResidentsScientific Management in 21st CenturyDoublethinkHidden Treasures: the Forgotten ArtLe Million: Pioneer of SoundComputer NetworksMending WallEmployee Behavior and Policy ChangeThe Color Purple JournalOpposing Prescription Drugs PricesGuajilote Cooperativo Forestal, HondurasBenefits of Open Source Software for Developing CountriesMedicine and ManagementThe Play about “Death of a Salesman”Healthcare Provider Supply IssuesIndustry RankingsCONSEQUENCES OF AMERICAN OCCUPATION IN JAPANMeaningful Way to RelaxCognitive PsychologyUnemployment in the United StatesSamsung’s Digital WorldRococo Artistic StylePsychology of MotivationECONOMIC BENEFITS OF USING OPEN SOURCE SOFTWARE IN DEVELOPING COUNTRIESPublic’s View on U.S. HealthcareWomen at the WorkplaceThe Impossibility of LanguageMiguel Arteta’s “Star Maps”Donatello's DavidDefining MarriageNatureShakespeare’s As You Like ItPerformance Management and Managing Team ConflictSouth Korean Won: Sept-Nov 2004How Location Affects PeopleSample Size DiscussionComputers and Electronic CommerceDiscussion on DeconstructionEthical Issues in the Professions and Business-The Nature of AdvertisingObscene Media DiscussionDopaminergic pathways in the brain and their role in cognition and motivationSLAVERY AS ONE OF THE CAUSES OF CIVIL WARFirst Generation vs. Second GenerationObligations Before OrganizationVan Gogh and GauguinWhat is Knowledge…Philosophy of SportThe Victorian FamilyThe Phenomenon of The Objectification and Commodification.Personal StatementWomen and revolutionsHuman RightsComparison of the Concept of Diagramming between M. Graves, and A. VidlerReligion in Mother CourageRiordan’s Inventory to Affect EmployeesKing Lear: One Passage in DetailPepsiCo’s International StrategiesChinese Human Smuggling ProblemGender Relations in the Arab World: Gaze Representation, Voice, and KnowingIllegal Immigrants: Deprived?Describing my Favorite RelativeLEBANONModernization and Commodification in SportIndigenous vs. European worldviewsSimple Linear Regression AnalysisReading responseSylvia Plath’s DaddyWassily Kandinsky and Piet MondrianDescribing my Favorite DayNursingPalestinian IdentityAuditing SamplingCross-dressing in Twelfth NightHealing Powers of WaterJohn Turteltaub’s "The Kid"What is Ethnohistory and Why Is It Important?Database ApplicationsVisual WesternisationAir Travel Price IndexImmigrants: Friends or Foes?Enlightenment in United States LegislatureSouth Asian Indian Families in AmericaHUMAN RESOURCE MANAGEMENT:STAFFING AND SELECTIONScouts or ScoutmasterSTRATEGIC MANAGEMENTDiscussing the ONO RuleChuck Close's EmmaLife Style Concept:Looking for Harmony and Life BalanceSociology: Explanations of CrimeSlavery in the Americas:Atlantic Slave TradeHarm ReductionNike: The Sweatshop DebateChildren & SocietySuccessful Fashion Marketing AnalysisMarcel DuchampInfections and InequalitiesKirpke and Proper NamesRevolutions in America and FranceManaging ConflictsQuestions that Really Bother meJustice of Oedipus and King LearArt Historical Categories: Symbolism and Art NouveauThe Historical Evolution of the United States Monetary SystemSlavery Abolition in the United KingdomSearching For Harmony By works of Toni Morrison’s Sula and Leslie Marmon Silko’s Ceremony.Obligations and availability of services - advertisingCreation Myths vs. Origin of SpeciesTHE RISE OF BIG BUSINESS AFTER THE CIVIL WAR: Expansion of Market Size and Economies of ScaleAccounting AssignmentPresident's ProposalNeedsWriting an Essay: A Responsive ActionPaul Cezanne’s “Houses on the Roadside”Simple Regression AnalysisPeople with Different TraitsAttribute SamplingCurrent Employment Trend in Healthcare: ShortagesCarcinogensGreenhouse Effect DescribedHow to Keep a Friendship?Northwest Airlines: External ImpactsCriticizing Peter FittingDavid Anspaugh’s "Hoosiers"Auteur perception of reality in “Amores Perros” and “Los Olvidados”Major Political Parties in the USRegression AnalysisAmerican Revolution and Bill of RightsFormalist AnalysisBlindfold ExperienceCatholic Belief SystemMerits of Options and Futures to HedgersMilinder recycling companyHistory of ToledoHuman AndroidLeo Tolstoy: Visions of HappinessRace and Ethnicity in the 19th CenturyAmerican Parties and ElectionsBritish, French, and Dutch ColoniesDefining the ManagerI am a Man More Sinned Against than Sinning: Lear & OedipusPolitical EcologyWhy people over the age of seventy shouldn't driveIslam, a Short History by Karen ArmstrongQuality of Healthcare ServicesExpressionists: AlienationProtecting Planet Earth from the Tallihae AliensLord of the Flies: Movie vs. the BookThe United States and Canada as Pure Democratic Virtue? vs. Latin American Countries as Pure Totalitarian Evil?A Poet’s TriumphPersonal Diet and Activity PlanComparison and Contrast of Three Monotheism CulturesAthletics in Ancient GreeceIngres's "Grand Odalisque" and Manet's "Olympia"Self-RespectThe Meaning and Possibility of FaithPsychological and Ethical EgoismShould Pre-Meditated Violence in Hockey Be Tried in Criminal Courts?Bodybuilders as a SubcultureHow a Stranger Would View MeMarnelle Tokio’s "More Than You Can Chew"“Separate but Equal”Discussion of A DollComparison of Two Books: Circle of Simplicity vs. Getting Things DoneRelics and the Romanesque ChurchesOffice Software Pros and ConsRacism in Ralph Ellison's "Invisible Man"Antebellum ReformsThe World War IIEffects of Social Inequality on ParentingWoman’s Place in MarriageWordsDropping the Nuclear Bomb?CarcinogensObligations to SocietyDavid Hume’s Philosophy DoctrineSearch EnginesForecasting, Inventory Management, and Materials Requirement PlanningCustomer ServicesRights as ClaimsINTERNATIONAL STRATEGIC MANAGEMENTLiterature Review: Open-source software19th Century View on ArtHeroism in Nationalist LiteratureWhy did America experience Civil WarAddiction to SportShooting at Kent State UniversityUnited Kingdom Promotes and Harmonises International TradeAnalyzing Swift’s “A Modest Proposal”USA Patriot Act and LibrariesThe Greenhouse EffectHealth Care Spending in the United StatesService Encounters ProjectECONOMIC CHANGES IN THE COMING YEARThe Yellow WallpaperFord Motor Company Human ResourceTimeless Beauty – Critical Analysis of Beauty CompetitionsCommunityMarketing OrientationCharles Demuth's Figure Five in GoldJackson PollockYield ManagementDiscrimination or not?Describing the Best FriendEffects of Disco Music on SocietyResearch Proposal:Vietnam WarBusiness ProposalPerson-Centered TherapyChildren SociologySlavery in the Americas:Atlantic Slave TradeMontessori PhilosophyLear & Oedipus: Image vs. RealityDrug Availability in the United StatesBanana RepublicMy Body is My Own BusinessLes MiserablesTHE SONDERWEG THESISE-commerce Operations ManagementHealthcare system: nursing and monitoringNegligence and strict liability theoriesWhen Markets Melt AwayMy best and worst learning experienceThe Importance of VeterinaryOffice Software Pros and ConsOrganization CommunicationsThe Western and the IndiansMarx & Weber Contributions Contrasted Against Other 20th Century WritersUse of Technology in MathematicsCritique of Losing Love, Love and Death, and The NecklaceFashion Marketing Admission EssayComprehensive report of an “auto manufacturing” industryPerennialism vs. ProgressivismRoles of Pride and Prejudice in 'Pride and Prejudice'Case Study: Let it PourBartleby the ScrivenerArticle AnalysisEmil’s TeachersMasters in Fashion Buying & Promotion Personal StatementSNOWTimeless Beauty – a critical analysis of beauty competitions.Simple Linear Regression AnalysisCandide: Hope vs. MisfortuneChina - NAFTA Free Trade AgreementHow Real is Reality TV?RISE OF BIG BUSINESS: RAPID CORPORATE GROWTH AFTER 1860-S IN AMERICA.Motivational PrinciplesAncient Roman ArtRiordan System Design ReportLooking for a Rain GodMarijuana: medicine or poison?Multiple Regression AnalysisSociology 265-asiaWounded KneeMoral Obligations of WorkersMcDonald's Global Market OverseasSevere Acute Respiratory SyndromeThe Emperor’s ClubEthnic Groups in AmericaEffect of the Equality of Sexes in World War IIThe Day I Was BornChristianity: Faith and WorksLEARNING ORGANIZATION: WHAT ARE OUR ROLES?Advertisement Analysis Using the Toulmin MethodMilitary OrganizationEmerson’s Books ComparisonIs Atheism Rationally Justifiable?The Turn of the ScrewManagement of Organizational ChangeHUMAN RESOURCE MANAGEMENT IN HOSPITALITY INDUSTRYSynthesisCotton Industry in ChinaOppressed Korean in JapanData Input / Output Methods“A Midsummer’s Night Dream” vs “Angels in America”The Godfather: Movie vs. the BookChina and the United StatesEntertainers and AthletesThe Existence of GodFamily and Change: Social Change in CanadaPsychology: Reflection on Publish ResearchMy Role as a TeacherHamod’s Poem OutlineUse of Statistics in Human ResourceAshcan: George B. Luks' Boy with a BaseballHow does work guide the development of the self?Computers in Entertainment IndustryInstitutional RacismMorality: Objective vs. SubjectiveWal-MartEuropean Union Safety Legislation: The Affects on Marketing in the European UnionPublicity vs. PrivacyEmployee MotivationArgument EvaluationsChonitaKmart, Wal-Mart, TargetKing Lear JournalAssisted SuicideCostco Strategy for the FutureReengineeringMy Reasons for Enrollment in CCNHJapanese American InternmentWomen’s Experience and Family LifeLear & Oedipus: Lack of KnowledgeThe Libations Bearers and HamletSecond American RevolutionCAFTA VS. NAFTAHuman BehaviorPhilosophy and Law
Questions before you order?

Email now and ask our support managers if you have any questions or concerns before placing your order.

Latest news (RSS)