INFLATIONARY Meaning and
Definition
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Inflationary refers to a concept related to inflation, which is the sustained increase in the general price level of goods and services in an economy over a specific period of time. The term "inflationary" is used to describe situations, events, or policies that contribute to or promote inflation.
In an economic context, when an economy experiences an inflationary period, prices of goods and services rise steadily, reducing the purchasing power of the currency. It is often associated with an expansion of the money supply, where the value of money decreases, causing a surge in prices. The factors contributing to inflation can vary, such as increased demand, rising production costs, excessive government spending, or changes in exchange rates.
Policy measures or economic events that can be described as inflationary include loose monetary policies, such as increasing the money supply and reducing interest rates, as well as uncontrolled government spending. These actions can lead to a rise in inflation rates, as more money is available in the economy, creating excess demand and subsequently increasing prices.
Inflationary pressures can have various impacts on an economy, including eroding consumer purchasing power, reducing real wages, distorting price signals, and affecting investment and spending decisions. Governments and central banks closely monitor inflationary trends to implement appropriate policies to counteract or control its effects, as high inflation rates can lead to macroeconomic instability and negatively impact economic growth and stability.
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Etymology of INFLATIONARY
The word "inflationary" originates from the noun "inflation", which comes from the Latin word "inflatio", meaning "a blowing up". It stems from the verb "inflare", which means "to blow into" or "to swell". In the context of economics, "inflation" refers to a sustained increase in the general price level of goods and services in an economy over a period of time. The adjective "inflationary" was formed by adding the suffix "-ary" to "inflation", indicating a relationship or association with inflation. Therefore, "inflationary" describes something that is related to or has characteristics of inflation.
Similar spelling words for INFLATIONARY
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