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<h1>Hyperinflation</h1>
<p>Hyperinflation is a very high and accelerating rate of inflation. It is generally defined as an annual inflation rate of more than 50%. Hyperinflation can lead to a breakdown in the economic and political systems of a country and can have severe negative consequences for the population, such as a decline in overall living standards. </p>
<img src="https://www.investopedia.com/thmb/953j6mr0XoUuFj_jqvohO0nEEes=/750x0/filters:no_upscale():max_bytes(150000):strip_icc():format(webp)/HyperinflationV3-f0b22130c6f74243938b07d62f2b887c.png" width="500" height="300">
<p><small>Image source: Investopedia </small> </p>
<p> Hyperinflation can be caused by a variety of factors such as: printing money to finance government spending or a loss of confidence in the currency. It can also be caused by factors such as economic mismanagement, war, or political instability. </p>
<p>After World War I the German government printed large amounts of money to pay for the war and the reparations demanded by the Allies. This led to a rapid expansion of the money supply and an increase in prices. By 1923, the annual inflation rate in Germany had reached over 1,000,000%. Prices for goods and services were increasing so rapidly that people had to carry wheelbarrows of cash to buy basic items such as bread. The hyperinflation led to a collapse in the German economy and contributed to the rise of the Nazi Party.</p>
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<h1>High Inflation</h1>
<p>High inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. It is generally defined as an annual inflation rate of more than 10%. High inflation can lead to a decline in the purchasing power of money and can have negative consequences for the economy and for individuals, such as an increase in the cost of living, a decline in consumer confidence, and a reduction in the value of savings. Recently many countries have experienced high inflation due to factors like supply chain disruptions caused by Covid-19 pandemic and increased energy prices fueled by Ukraine-Russia war.</p>
<img src="http://feedingsandiego.org/wp-content/uploads/2022/06/inflation-graphic-grocery-cost-fsd.jpg" width="500" height="300">
<p><small> Image source: Feeding Sadn Diego </small> </p>
<p>The high inflation that occurred in the United Kingdom in the 1970s reached a peak of 26.9% in 1975. The high inflation was caused by a variety of factors, including an increase in the money supply, an increase in government spending, and a decline in levels of borrowing and debt. The high inflation led to a decline in the purchasing power of money and a decrease in living standards.</p>
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<h1>Deflation</h1>
<p> Deflation is a sustained decrease in the general price level of goods and services in an economy over a period of time. When the general price level falls, each unit of currency buys more goods and services; consequently, deflation reflects an increase in the purchasing power of money. Deflation can have negative consequences for an economy, such as a decline in economic activity, an increase in debt burdens, and a decrease in asset values. Central banks, such as the Federal Reserve in the United States, can use monetary policy to try to prevent deflation by increasing the supply of money in the economy.</p>
<img src="https://img.etimg.com/thumb/width-600,height-450,msid-50816428,imgsize-31133/what-is-deflation-watch-video-to-know-more.jpg" width="500" height="300">
<p><small> Image source: The Economic Times </small> </p>
<p>Deflation occurred in the United States during the Great Depression of the 1930s. The deflation rate in the United States reached a peak of -10.3% in 1933. The deflation was caused by a variety of factors, such as a decrease in the money supply, a decrease in government spending, and a decline in borrowing and debt. Deflation led to a decline in economic activity and a decrease in asset values, which contributed to the severity of the Great Depression.</p>
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<h1>Stagflation</h1>
<p>Stagflation is a combination of high inflation and stagnant economic growth. It occurs when the general price level is rising at a rapid pace, but the economy is not growing or is growing very slowly. Stagflation can be difficult for policymakers to address because the usual tools used to stimulate economic growth, such as increasing government spending or cutting interest rates, can also lead to further increases in prices. Stagflation can have negative consequences for an economy, such as a decline in living standards, declining consumer confidence, and a reduction in the value of savings. It can also lead to social and political unrest. </p>
<img src="https://cdn.corporatefinanceinstitute.com/assets/stagflation.png" width="500" height="300">
<p><small> Image source: Corporate Finance Institute </small> </p>
<p>Stagflation occurred in the United Kingdom in the 1970s due to a combination of high inflation and slow economic growth during this period. The inflation rate reached a peak of 26.9% in 1975, while the economic growth rate was very slow, averaging just 2.2% per year from 1973 to 1979. The stagflation was caused by a variety of factors, including an increase in the price of oil, an increase in the cost of production, and an increase in the demand for goods and services relative to their supply. The stagflation led to a decline in living standards and a decrease in consumer confidence. </p>
<iframe width="640" height="360" src="https://www.youtube.com/embed/YaC_PNKu_Cg" frameborder="0" allowfullscreen></iframe>
<p><small> Image source: One Minute Economics </small> </p>
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