LIVEInvesting requires skill & to become notable at it, investors must be familiar with factors that impact their investments. One of these crucial aspects is #inflation. Understanding inflation is essential for making informed investment decisions. So let's talk more about it
๐ด๐๐ง ๐ญ๐ก๐ข๐ฌ ๐ญ๐ก๐ซ๐๐๐, ๐ฐ๐'๐ฅ๐ฅ ๐๐ข๐ฌ๐๐ฎ๐ฌ๐ฌ:
โ๏ธHow Does Inflation Work?
โ๏ธWhy does inflation occur?
๐ก๐๐จ๐ฐ ๐๐จ๐๐ฌ ๐๐ง๐๐ฅ๐๐ญ๐ข๐จ๐ง ๐๐จ๐ซ๐ค?
Inflation refers to the rise in the price of goods & services, which reduces the purchasing power of each unit of currency. So, if a KG of mango cost $0.5 in 2020 & a KG of mango cost $1 in 2023,your purchasing power drops cos you will only get 1/2 a KG of mango for $0.5 in 2023
Moderate inflation is required to sustain econ growth, but when it becomes too high for an extended period of time, its bad for economy. Hot inflation shows that consumer demand exceed supply. Rising prices, so wen prices at peak, spending falls, which can easily lead to recession
๐ก๐๐ก๐ฒ ๐๐จ๐๐ฌ ๐ข๐ง๐๐ฅ๐๐ญ๐ข๐จ๐ง ๐จ๐๐๐ฎ๐ซ?
The fundamental components that reflect the rate of inflation are supply and demand, hence economists characterize two forms of inflation depending on the fluctuating nature of supply and demand:
~ Demand pull inflationโก๏ธ
~ Cost push inflationโก๏ธ
The most common sort of demand-pull inflation occurs when demand drives up the price of goods or services. When there is a disruption in the supply of goods or services, such as when there is a global epidemic, cost-push inflation occurs.
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