Page 125 - Macroeconomics. book docx_Neat

Causes of Inflation

- Excess money supply

- High government spending

- Rising production costs

- Currency depreciation

- Supply shortages

Effects of Inflation

- Reduction in purchasing power

- Uncertainty in investment decisions

- Redistribution of income

- Negative impact on savings

- Balance of payments problems

Anti-Inflation Policies

- Contractionary monetary policy

- Reducing government budget deficit

- Controlling money supply

- Improving productivity

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