Name: Noor Taha Ahmed Al-Sakkaf

Course: IB Semester 1 (Group 2)

Date: 26/09/2022

Subject: Microeconomics

 Assignment: Inflation with example

 The following paragraph covers inflation, its types and a real-world example of inflation.

Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.
The rate at which purchasing power drops can be reflected in the average price increase of a
basket of selected goods and services over some period of time. The rise in prices, which is often
expressed as a percentage, means that a unit of currency effectively buys less than it did in prior
periods. Inflation is sometimes classified into three types: demand-pull inflation, cost-push
inflation, and built-in inflation.

Governments aim to control inflation because it reduces the value of money and the spending
power of households, governments and firms. For example, the inflation rare in the western Asian
country of Syria was around 48 per cent in 2013, meaning that the general price level in Syria
increased by an average of 48 per cent in a year. This means that a product priced at 100 Syrian
pounds would increase to 148 Syrian pounds by the end of the year. This makes conditions far less
economically stable in Syria than in other countries in the world with low and stable rates
inflation.