Economics Assignment3.0 inflation rate
.Define what is inflation:
Inflation is an increase of price level of goods and services overtime.
. Causes of inflation:
Inflation is caused by mainly 2 factors: Demand pull factors or cost pull inflation.
*demand pull inflation occurs when prices of goods and services rises because of high demand. If demand of goods and services in an economy, the government will tend to increase tax on the products of which will lead to an increase of prices.
These are some causes of demand-pull factors:
a developing economy: people are paid quiet well paid compared to other under developed countries, so they will try to spend a lot on their money trying to buy more of what they need in this way demand of goods or services will increase which will lead to an increase in price too.
Government purchase: when the government decides to concentrate on the purchasing of medical instruments like scanners; surgery instruments more foreign doctors this will increase prices of those new purchase.
Creation of more money in an economy or making more notes: the presence of much money than goods available this will increase or will make the prices going up because there is more money than the availability of goods.
*cost-pull inflation: cost pull inflation is a situation where prices increase due to an increase of raw materials such as wood, land cost, machineries…etc. when these materials which they use to produce finished good increase in price finished goods are going to increase in price too.
One of the main cause of cost-pull inflation is natural disasters like earthquake; volcano these can cause a high cost-pull inflation.
*types of inflation:
There are 2 types of inflation:1. creeping inflation and 2. Hyper- inflation.
1 creeping inflation: a creeping inflation is a situation where the inflation of an economy rises or increases overtime
2Hyper inflation is when prices of goods and services rises rapidly in a month. Example: 1kg of rice might be at 5 RM in the morning then the price goes up to 10 RM in the evening.
* when a government decides to print more money than they are actually earning there will be presence of money in the pockets of citizens and this will cause the increase of prices of good and services. Since there is more money than goods; goods will increase the price anyhow at anytime.
*HOW TO MEASURE INFLATION;
Inflation rate can be measured using CPI(consumer price index).CPI is a way to measure changes in price of good and services of the consumers.
Current inflation Brazil – CPI inflation
Current inflation Brazil (CPI) – This page features an overview of current Brazilian inflation: CPI Brazil. The inflation rate is based upon the consumer price index (CPI). The inflation table and graph present the inflation rates during the last 12 months. The CPI inflation rates in the table are presented both on a monthly basis, compared to the month before, as well as on a yearly basis, compared to the same month last year.Using the tabs you can switch between the current CPI inflation overview and the current HICP inflation overview. In case you are interested in the historic inflation in Brazil (CPI), click here.
inflation – CPIChart – current CPI inflation Brazil (yearly basis) – last 12 months
Table – current inflation Brazil (CPI) – last 12 months
inflation (monthly basis) inflation inflation (yearly basis) inflation
august 2018 – july 2018 -0.09 % august 2018 – august 2017 4.19 %
july 2018 – june 2018 0.33 % july 2018 – july 2017 4.48 %
june 2018 – may 2018 1.26 % june 2018 – june 2017 4.39 %
may 2018 – april 2018 0.40 % may 2018 – may 2017 2.85 %
april 2018 – march 2018 0.22 % april 2018 – april 2017 2.76 %
march 2018 – february 2018 0.09 % march 2018 – march 2017 2.68 %
february 2018 – january 2018 0.32 % february 2018 – february 2017 2.84 %
january 2018 – december 2017 0.29 % january 2018 – january 2017 2.86 %
december 2017 – november 2017 0.44 % december 2017 – december 2016 2.95 %
november 2017 – october 2017 0.28 % november 2017 – november 2016 2.80 %
october 2017 – september 2017 0.42 % october 2017 – october 2016 2.70 %
september 2017 – august 2017 0.16 % september 2017 – september 2016 2.54 %
Current CPI inflation
Based on the graph above, brazil’s inflation was 2.54% in september2017-september2016 later it increased to 4.19% in august2018-august2017(yearly basis inflation).
In december2017-august2017 the inflation rate was at0.16% in brazil later in august2018-july2018 the rate is at -0.19%.here the rate between decreased(monthly basis inflation).