The positive and negative effects of inflation.

[TOZZIBLINKZ]

Inflation to some extent is considered as a disadvantage , but if seen correctly from a particular angle it could also be considered as an advantage . to those not familiar to what an inflation is , it's simply refers to the persistent rise in the general price level of goods and services . it is important to know that inflation occurs when volume of purchases is currently running ahead of production , in a lay man understanding it refers to the situation where too much money in circulation are chasing too few goods . In a particular country inflation occurs as a result of increase in demand , low production increase in salaries and wages , war , high cost of production , population increased , excessive bank lending , budget deficit , inadequate storage facilities , and money laundering etc .

MERITS OF INFLATION :
As as a result of inflation they debtors gain because there is too much money in circulation which will enable them to pay their debt with ease , because of inflation producers are selling their goods at higher price which will lead to higher profit making , as a result of high volume of money in circulation government is able to gain high yield from taxes .

DEMERITS OF INFLATION :
One major negative effects of inflation is that it discourages the habit of saving , because people spend more leading to low or no savings , also inflation redistribute income haphazardly . and there is no fault in real-time conversations of those on fixed income e g pensioners .

 

[Jasz]

Inflation is usually defined as a general rise in the price of goods and services widespread across a country. It is a condition when prices in an economy are higher than usual. The change in prices is referred to as inflation rate. The causes of inflation could be domestic or foreign, economic or political reasons. Inflation Rate measures the rate at which prices of goods and services rise over time.

There are several economic drawbacks of inflation. Inflation can contribute to economic malpractices. For example, price controls may not be effective if altered prices are not passed on to consumers. Since there is no harm in passing on a price increase for a good or service, there is no downside to altering the price of this good or service. Inflation also discourages savings since savings can lose purchasing power over time. For example, if money saved is invested in an account that earns interest but the inflation rate is 4%, the price of goods and services will have increased by approximately 4% by the end of one year and 8% after two years of saving. Inflation can spur a speculative boom-bust cycle in business investment based on expectations about future inflation rates.

 

[Sotherefore]

Inflation is always as a result of the fact that the economy of a particular country is not moving as expected . If the government of a country really plans on how to improve the economy of their country by boosting the production of raw materials for exportation, there would be no and sometimes little rate of inflation . when the government have a better plan for the economy of their country the economy of the country will move perfectly with full Force without any problem or hindrances.

The same is also applicable to our country here , the government does not really care about us and if we continue this way it is quite clear that there may be possible inflation in our country because the government do not really put a single effort towards improving the economy of our country.

What I understand about inflation is that there is no advantage because everything both goods and services always be at a high price.

It could even affect a simple thing like starting up a business because the required money you set up to start up a business may not be enough since every product will be very high in prices

 

[sincerem]

Inflation has more demerits compare to its merits. I wouldn't pray to see my country suffer from inflation too long. Even though we've been through inflation for years now, with time it will come back in order. Mismanagement of funds through embezzlement us one of the causes of inflation in a given country. When a country lack adequate knowledge to utilize the revenue of the country into better development it keeps the country stagnant no massive development coming in, no foreign investors coming in. Such decreases the country's revenue generation from different sources especially in the international market, because their is no nothing to show for that is generating them money. Which drags negative effects to the country's economy causing devaluation of their currency, making it hard to purchase foreign products at a stable rate just as they were buying before. Since foreign products becomes expensive for traders to buy, it makes it difficult too for the consumers to purchase, due to the higher price they're force to purchase the products. If you're holding foreign currencies that are greater in value to your local fiat currency that's when you're at advantage before inflation occurs, your monetary asset wouldn't face same devaluation which your country's fiat suffers when it is marred by inflation.

 

[Setho]

There are usually a lot of economic happenings that might make money to be generally too much in circulation or to make the general purchasing power of the citizens to become haphazard . A lot of people usually say that inflation has some advantages but I really think that the disadvantages are far more than the advantages .
If there is an increase in the inflation in the country it means that people who have collected long-term debt are going to be at an advantage because it is going to be much more easier for them to repay. This is going to be possible because provided that there is a lot of money in circulation they can always be able to pay the money at the exact way in which they collected it in the first place and do not have to pay it at the current value .
No matter the situation at hand, inflation is very bad because it's generally gives a lot of uncertainty about the economy and nobody knows what is going to happen next and as such people are going to be reluctant to make big decisions in business or to save money in preparation for a project .