Are you wondering why the price of everything has gone up? Let's find out in this short in-depth podcast episode.

Transcript

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Hello and welcome back to This Week in the Royal Podcast. My name is Miriam and I'm your host. 20s Today we'll be discussing inflation. 2s In the world we live in now. I think everybody knows what inflation is and has been affected by it. However, the US Department of Labor says inflation can be defined as the overall general upward price movement of goods and services in an economy. A good, straightforward example of inflation in action can be seen in the price of milk. In 1913, a gallon of milk cost about $0.36 per gallon. 100 years later, in 2013, a gallon of milk cost $3.53. Nearly ten times higher. And now you can see what inflation is by that example if you didn't know. 1s Now, when I decided to talk about inflation, there was something I didn't know. Inflation is sometimes classified into three types demand pull inflation, cost push inflation, and built-in inflation. Demand-pull is when the total demand for goods and services increases to exceed the supply of goods and services that can be sustainably produced. Thus, push inflation occurs when overall prices increase due to increases in the cost of wages and raw materials built-in. Inflation is a type of inflation that results from past events and persists in the present. The question I have for you guys today is, do you think the inflation that we're living in right now can be classified into any of these three types, or do you guys think we have all three of them? So what is causing inflation now? Everything around us has higher prices due to inflation in general. Several things can lead to inflation. The pandemic's economic stability, stimulus, pent-up consumer demand, and supply chain problems have all contributed to the recent spike in inflation. Now you're probably asking how can we reduce inflation. 1s Well, there's no way to fix inflation, but we can reduce it. Interest rates are the main tool used by monetary policy to manage inflation. However, fiscal policy is one way that the government can help combat inflation to help lower inflation and governments can raise taxes and cut spending. 1s And that's it for today. I hope you enjoyed this really short episode. I'll see you in the next one. Bye.