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

Transcript

_________________________________________

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 ofLabor says inflation can be defined as the overall general upward pricemovement of goods and services in an economy. A good, straightforward exampleof inflation in action can be seen in the price of milk. In 1913, a gallon ofmilk cost about $0.36 per gallon. 100 years later, in 2013, a gallon of milkcost $3.53. Nearly ten times higher. And now you can see what inflation is bythat 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 typesdemand pull inflation, cost push inflation, and built-in inflation. Demand-pullis when the total demand for goods and services increases to exceed the supplyof goods and services that can be sustainably produced. Thus, push inflationoccurs when overall prices increase due to increases in the cost of wages and rawmaterials built-in. Inflation is a type of inflation that results from pastevents and persists in the present. The question I have for you guys today is, doyou think the inflation that we're living in right now can be classified intoany of these three types, or do you guys think we have all three of them? Sowhat is causing inflation now? Everything around us has higher prices due toinflation in general. Several things can lead to inflation. The pandemic'seconomic stability, stimulus, pent-up consumer demand, and supply chain problemshave all contributed to the recent spike in inflation. Now you're probablyasking how can we reduce inflation. 1s Well, there's no way to fix inflation, but we can reduceit. Interest rates are the main tool used by monetary policy to manageinflation. However, fiscal policy is one way that the government can helpcombat inflation to help lower inflation and governments can raise taxes andcut spending. 1s And that's it for today. I hope you enjoyed this really shortepisode. I'll see you in the next one. Bye.