The issue of too much currency “INFLATION”-part one

                          The issue of too much currency “INFLATION” – part one

• Inflation describes a typical situation when the demand for goods and services exceeds to the available supply.
• Ordinarily inflation means a general rise in the price.
• The whole world is facing this problem.
• A sudden increase in the circulation of money also describes inflation.
• Natural calamities like floods and famines can cause inflation.
• Pakistan has faced these situations in 1965 and 1971 due to wars and in 1973, worst floods were the main cause of inflation.
• Standard of living,international circumstances and political crisis may cause inflation.
• To overcome this problem is a difficult task but economists suggest some remedies.

In economics inflation describes a specific situation whereby the demand for goods and services exceeds to the available supply. Hawtrey in 1928 defined inflation as “The issue of too much currency”. Prof. Gagory a form a advisor to the undivided Govt. Of indo – Pakistan in his article on inflation defined it as “ an abnormal increase in the quantity of purchasing power”.

In every country there is a specific demand and supply within the country. There is a particular price fixed but sometimes supply increases and demand decreases and at a certain time demand increases and supply decreases. In ordinary language, inflation means a general rise in the price. Inflation is the problem of the whole world. It is a aburning question these days and every country of the world is trying to control it.

Generally inflation means a sudden increase in circulation of money in a country or we may say that if goods are less then the money in circulation, there is an inflation in the economy of a country. There are many causes of inflation; they are as follows.

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