Supply and demand are important factors that cause inflation. Let’s break it down:
High Demand: When lots of people want to buy more products than what is actually available, prices go up. For example, during the holidays, many people want to buy gifts, so stores increase prices!
Low Supply: If there isn't enough of something, like during a drought when crops fail, the small amount available can make prices rise. Everyone still wants to buy it, which leads to competition for those items.
Economic Growth: When the economy is doing well, more people have jobs and are earning money. This means they can spend more, which can also lead to higher prices.
In simple terms, when more people want things than what’s on the shelves, it can cause inflation!
Supply and demand are important factors that cause inflation. Let’s break it down:
High Demand: When lots of people want to buy more products than what is actually available, prices go up. For example, during the holidays, many people want to buy gifts, so stores increase prices!
Low Supply: If there isn't enough of something, like during a drought when crops fail, the small amount available can make prices rise. Everyone still wants to buy it, which leads to competition for those items.
Economic Growth: When the economy is doing well, more people have jobs and are earning money. This means they can spend more, which can also lead to higher prices.
In simple terms, when more people want things than what’s on the shelves, it can cause inflation!