Project report on inflation

History:-

Large infusions of gold or silver into an economy have historically resulted in inflation. When silver was used as currency, for example, the government could collect silver coins, melt them down, combine them with other metals like copper or lead, and reissue them at the same nominal value. The denarius held more than 90% silver when Nero became Roman emperor in AD 54, but by the 270s, there was almost no silver remaining. The government might issue more coins without increasing the amount of silver required to manufacture them by diluting silver with other metals. The government benefits from an increase in seigniorage when the cost of each coin is reduced in this way.^] This method would expand the money supply while simultaneously lowering the relative worth of each coin. Consumers would have to give more money in return for the same goods and services as before when the relative value of the coins decreases. As the value of each coin decreases, the price of these products and services will rise.^23]
From the 18th century onwards, the use of fiat currency by many governments allowed for far wider changes in the quantity of money. Hyperinflations — bouts of extraordinary inflation rates far higher than those experienced in earlier periods of commodity money – have occurred several times in countries undergoing political crises as a result of rapid growth in the money supply. A famous example is the hyperinflation in the Weimar Republic of Germany. Venezuela currently has the world's highest hyperinflation, with an annual inflation rate of 833,997 percent as of October 2018.
In countries with independent central banks, however, inflation has been kept low and stable since the 1980s. As a result, the business cycle has slowed and most macroeconomic indicators have become less variable, a phenomenon known as the Great Moderation.

Historical Inflationary Period: -

Throughout history, many different cultures have experienced rapid growth in the quantity of money or in the overall money supply, with the types of money utilized altering.

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