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Inflation is generalized increase of prices of goods and services in an economy, along with a corresponding fall in the purchasing value of money. The rate of inflation refers to the increase of the price of goods and services over time.

7 votes
3 answers
14k views

Why is a higher inflation rate bad for international competitiveness?

Why if there's a higher inflation rate in country A then its exports are less competitive and its trading partners prefer to buy from countries with lower inflation rates? …
Richard Smith's user avatar
3 votes
2 answers
5k views

How inflation affects exchange rates?

So inflation weakens country's currency. … My reasoning is that this is logical that this should happen because now £1 is worth less than it was before the inflation (with the same amount of pounds you could buy twice as much before the inflation
Richard Smith's user avatar
1 vote
2 answers
1k views

Floating exchange rate and cost-push inflation?

However, this could lead to even higher import prices of finished goods, componetns, and raw materials, and thus cost-push inflation, which may further fuel the overall inflation rate." … They've said that imports are cheaper after inflation, so imported raw materials, etc. should be cheaper as well so the costs of productions should be cheaper too and don't cause cost-push inflation but …
Richard Smith's user avatar