Herlina Mayang / 23211345
/ 3eb 19
Inflation - Causes and
Effects
Older people often
talk about how cheap things were when they were young.
(1)A brand new car may have cost only
$5,000 compared to $20,000
today, or petrol that cost only a few cents in the 60s costs over a dollar
today. (2)Inflation happens when money loses some of its value. We measure the rise of inflation in
percent. (3)For
example, 2% inflation means that a $1 bottle of milk will cost $1.02 next year.
Causes of Inflation
Inflation has many causes. (4)In times when the economy
is good and people have enough money they want to buy more products than
factories can produce, so the prices go up.
(5)Inflation can also happen when worker’s demand more money or when the raw materials that producers need rise in price. The end product becomes more
expensive and has to be sold at a higher price.
(6)Some economists say that central
banks do not do enough to control how much money there is in a country.
(7)There may
be more money around than there are goods. Consumers want to buy more
products, the demand gets higher and prices go up. (8)Sometimes low interest rates on loans
make people borrow money to buy houses or cars. These prices go up as
well.
Inflation is not produced by one country alone. (9)Sometimes a
country cannot control the prices of certain goods as it would like to. A country that does not have any
energy supplies of its own has to import energy. It has
to pay a high price for oil and gas.
(10)Inflation in the past happened in times of crisis, war or conflict.
(11)Governments
printed too much money and didn’t have the goods that people could buy. (12)This
happened in the final years of World War II. (13)By the end of the war the German currency was not even worth the paper on which it was printed.
Effects of inflation
(14)Inflation is a sign
that the economy is growing. (15)It is
normal when prices go up only a few percent every year. High inflation,
on the other hand, leads to uncertainty
in the population.
(16)Industries may not want to borrow money and invest when inflation is
high.
(17)People
don’t want to buy goods any more. (18)Factories may get stuck
with products they cannot sell and as a result workers get unemployed.
It is very difficult to fight inflation. (19)Banks can
control interest rates and make it difficult for people to get loans and have
more money. (20)Governments have an effect
on inflation when they raise or
lower taxes. They can also try to control wages and prices as far as possible.
TENSES
1. Simple
Present Tense
Reason
: subject + passive verb (compared to) + today
2. Simple
Present Tense
Reason
: subject + verb 1 (s) + object
3. Simple
Future Tenses
Reason:
subject + will + verb 1 + next year
4. Simple
Present Tense
Reason
: subject + verb 1 + object
5. Simple Present Tense
Reason
: subject + verb 1 + object
6. Simple
Present Tenses
Reason
: subject + verb 1 + do not + object
7. Simple
Present Tenses
Reason
: subject + verb 1 + object
8. Simple
Present Tenses
Reason
: subject + verb 1 + object
9. Simple
Presents Tenses
Reason
: subject + can not + object
10. Simple
Past Tenses
Reason
: subject + verb 2 (happened)
11. Simple
Past Tenses
Reason
: subject + verb 2 (printed) +and+ didn’t + have +object
12. Simple
Past Tenses
Reason
: subject + verb 2 (happened) + object = causes
13. Simple
Past Tenses
Reason
: past even + subject + was not +object
+ it was + verb 2 (printed)
14. Simple
Continuous Tenses
Reason
: subject + to be + grow + ing
15. Simple
Present Tenses
Reason
: subject + to be+ verb 1 + object
16. Simple
Present Tenses
Reason
: subject + may not + object
17. Simple
Present Tenses
Reason
: subject + do not + object
18. Simple
Present Tenses
Reason
: subject (s) + cannot + object
19. Simple
Present Tenses
Reason
: subject + verb 1 + object
20. Simple
Present Tenses
Reason
: subject + verb 1 +object
