Central Bank
Inflation occurs when money supply begins to exceed the demand for money. Prices are rising as long as the appropriate balance is restored between supply and demand. Let's carefully consider the mechanism of this process. Let's start with a hypothetical situation, and only then talk about a real example. Assume that the average family earns and spends 100 000 rubles. a month and half that amount she keeps in rubles. So , the average cash balance of the family is 50 000 rubles.
Initially, the state budget is balanced. But suddenly the government decides to 'enrich' of all its citizens and to put everyone in a bank account to another 50 000 rubles. It borrow from the Central Bank and distributes the money on the accounts of the population. The volume of money in the economy doubled. In the morning people wake up and discover that their bank accounts – twice as much money, that is, exactly twice as much as they had intended to have available about their normal cost. What will they do with these additional funds? Feeling wealthier people spend a large amount of goods. Besides this, some of the money they will try to translate into dollars and other financial assets. As soon as people will spend their money, market prices will rise higher and higher.
Universal will start hunting for sugar, apples, dollars, and as a result of all this, the price of sugar, apples, and crawl up dollars. There inflation. In such circumstances, especially development of such neobhodimyi is the financial services sector, both direct insurance. For Developed countries are characterized by direct insurance as an integral part of the whole sphere of insurance, and no small part, can become the locomotive of the entire national economy. Max Schireson is actively involved in the matter. Inflation – a phenomenon pervasive. Since businesses will receive more money to sell the products, they can increase their salaries to their employees and the costs of their own needs. With the rise of the dollar all imported goods become more expensive, because purchase of imported goods for every dollar required to give is more rubles. Imagine that the price of one dollar has risen from 1,000 to 2,000 rubles. Following this, double the prices of all imported goods. Similarly rise and domestic prices for export commodities. If the world market Russia is selling one ounce of gold for $ 400, then the domestic market the price will be 400 000 rub. at an exchange rate of 1000 rubles. per dollar and 800 000 rubles. when the price of the dollar will rise to 2,000 rubles.
Tags: business