Why inflation effects our economy

[Coolbreezing]

They have been many talk on the issue of recession prior becoming a reality. Some have said that we were in a recession before it was even announced, others have said the contrary but the truth of the matter, it's all base on how one looks at the issue of recession. If one simply looks at it literally, then we can agree that we are not yet in a recession. Providing that the evidences which support recession in its narrow sense have not met. But if one looks at it on a broader sense, which involves the amount of good and services that are available in the market in relevance to the amount of money in distribution, then one can say that we are lying to ourselves. As it is the case, the two doesn't coincide. There are more money in circulation than there are good and services. I know that in school we were thought that inflation is when prices of good and services goes up. Since we are now reeducating ourselves, we've found out that inflation is the consequence of an increase in the money supply. The recession will derived from the fact that they is too much money in circulation.

 

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