INFLATION

SUBMITTED BY:
JONATHAN SILARIO 11-WORDSWORTH
 WHAT IS INFLATION?
• A general rise of the price level in an ec
onomy over a period of time.
 WHY IS INFLATION OCCURS IN
AN ECONOMY?
Inflation occurs in an economy due to many reasons.
Increased money supply
Higher wages
Devaluation
Increase in UAT
Increased in demand
Raw material prices
Declining productivity
Higher taxes
 INCREASED MONEY SUPPLY
•Money supply plays an important role in determinin
g prices. If there is more money chasing the same am
ount of goods, then prices will be rising. Hyper Inflati
on is usually caused by an extreme increase in the m
oney supply.
 HIGHER WAGES

• Rising Wages are the most significant cost for many

firms, higher wages may also contribute to rising de
mand.
 DEVALUATION
• Increasing cost of imported goods and also the boo
st to damestic demand.
INCREASE IN VAT (Value Adde
d TAXE
• The increase in VAT can also affect the price of a sp
ecific product.
 INCREASE IN DEMAND
• Can affect the supply directly and as the supply gets
a direct hit of rise the overall prices of products goe
s to the rise.
 RAW MATERIAL PRICES
• e.g. Oil is used to transport all of the products throu
ghout the world, when oil does rises the products b
eing transported has also an increase.
 DECLINING PRODUCTIVITY
• We all know that the people in an economyis the ec
onomy itself. Without workforce the economy migh
t slow down it's developments. The declining produ
ctivity of the workforce can also affect the economy
as well as the products using workforce.
 HIGHER TAXES
• The higher taxes are the higher the overall prices of
the products.
• The overall causes of inflation pushes the economy to sl
owdown or boost its developments. The inflation rate c
an be either positive or negative depending on its actua
l effect on the overall economy that's why many econo
mist uses all of its knowledge to study and to maintain
an economie's developments. The philippines during th
e Covid-19 pandemic has crawling its economy, the affe
ct of widespread virus infection in the world and specifi
cally philippines goes on a higher inflation rate. The hig
her the consumer or the higher the population is, the h
igher the demand , the higher the wage, the higher the
person can buy the more supply is running out the mor
e it could cause inflation.
• Inflation can also cause a widespread hunger in a co
untry, whether we like it or not we all feel the effect
s of inflation. Before, our grandma and grandpa pur
chases for a kilo of palay in 2 pesos but now due to
higher inflation rate the price of a 1 kilogram rice ca
n be about 50 pesos. That's how it could cause to th
e consumers as well.
TERMINOLOGY
-total value of money available in an economy.
ECONOMICS
-the social science that studies how people interact
with value, in particular the production, distribtion a
nd consumption of goods and services.
PRICE INDEX
-a normalized average of price relatives for a given cl
ass of goods or services in a given region in a given p
eriod of time.
HYPERINFLATION
-a very high and typically accelerating inflation.