The inflation reasons
There are many reasons for inflation occurrence, depending on variety of factors. For example, inflation can occur, if the government prints a glut of money to cope with crisis. As a result, it concludes that the prices grow with very high speed not to lag behind surplus of currency. It is called as demand pull, at which the prices are compelled to go upwards because of a great demand.
Other widespread reason of inflation is growth of production costs that result ins to a rise in prices for a finished product. For example, if the raw materials rise in price, it result ins to production cost supplement that, in turn, result ins to bullish demonstration for the goods for maintenance of stable profit. Growth of payroll costs also can lead to inflation. A request of workers about pay increase, the companies routinely transfer on costs of the clients.
The international crediting and public debts can become the inflation Reason also. The countries borrowing capital, should be confident the economic strategy and march in step with the debts. Penetrating falling of the exchange rate of currency can lead to inflation as the governments will deal with distinctions of the prices in import and export levels.
At last, inflation can be called federal taxes of consumer products, such as cigarettes and fuel. At a tax increase, suppliers pass often price burden to the consumer; it it is favourable, because the raised prices, seldom drop, even if later the tax decreases.
War - the reason for inflation as the governments should reimburse the spent money borrowed from central bank. War mentions often all from international trade to labour costs to demand for a product, thus, in long run, it always result ins to bullish demonstration.