Outlines for Rising Prices or Inflation
Why do prices rise and why is there inflation?
the second cause of inflation,
the general rise in the standard of living of the people
the third cause decrease in the exports and an increase in the imports of the country
the fourth cause taxes of the government
the only solution to the problem of inflation is greater agricultural and industrial production
“The rising of prices is the setting of the sun of life for the poor man.”
The first cause of Inflation or rising or galloping prices is the result of an increase in the supply of money. The money becomes more than the supply of goods. In our country, we can see how fast our population is rising and how much more the people need in terms of food, fruit, clothes, shoes, soap and other articles of daily use. Our farms and factories are not producing food and goods according to the growing needs of the people. As a result, the prices of things like sugar in short supply shoot up, and the government is forced to print more currency notes to satisfy the people. This is exactly (precisely) the inflation that we are witnessing today.
The second cause of inflation or rising prices is the general rise in the standard of living of the people. With the greater demand for clothes, shoes, fine food, and other commodities. (articles), their prices register a constant rise. Thus, a rise in the incomes of the people is a sure sign of an increase in demand for goods and an increase in prices.
The third cause of inflation is the decrease in exports and increase in imports as it is happening in our country. When we buy more and more things (commodities) from other countries and sell less, imports become more expensive. All that we produce with imported materials (raw materials) like electric bulbs and fans and medicines become highly expensive.
Lastly, heavy government taxes and duties on goods produced inside the country and imported from abroad cause a rise in the price level. Quite a few goods being sold, needed by the people, are expensive on account of this. The only solution to the giant problem of inflation is greater agricultural and industrial production, greater exports, and lighter taxation. In addition, control over population growth is also necessary.
Rising Prices or Inflation Essay (350 Words)
There are a number of causes of inflation or rising prices. Firstly, when people start using different things more, their prices rise. Secondly, the prices of different things rise if their supply becomes less because of strikes of workers, closure of factories, floods, the absence of rainfall, and so on.
Another cause of inflation is the general rise in the standards of living of the people. As people start living a better life with an increase in their incomes, they need more clothes, shoes, and other things of daily use. They buy more luxury goods (for comfort and enjoyment) like electric fans, heaters, radio and television sets, and so on. Education becomes more common and people begin reading more newspapers, magazines, and books. If production increases, the cost of production also rises because of the higher wages of laborers and workers, higher prices of raw materials, and so on.
The government is often forced to print more currency notes and increase the supply and circulation of money in society. Then it can pay higher salaries, and wages to its workers. But if it cannot increase the production of different goods (as much as it increases the supply of money) prices suddenly jump.
A country may import raw materials for its factories. It may import machines and tools and food items. The prices of all these may be high on world markets. They will then also be high in the country importing them.
In fact, all countries should take joint steps to check inflation. The UN and other world agencies should try to settle disputes between countries. There should be an atmosphere of peace everywhere. Then countries and nations will work together to increase production and keep prices at a proper level. They will stop spending their resources on preparations for war.
The rise in world population should also be checked. It is difficult to raise the production of different things as fast as the population is increasing. It is necessary to study all the causes of inflation. Then these causes should be removed (or eliminated).