Price Inflation
Inflation recently decreased to 9.1%. For the 12 months ending November 2023, in the U.S., it was down to 3.1%. By comparison, inflation in the European Union is down to 2.4%.
Please find two articles written in the last year describing the causes of price inflation and how it does or does not impact demand for products that consumers regularly purchase. We are looking for actual causes, not economics textbook theory. The Government printing more money causes inflation (economic theory), but WHY does the Government print more money? What is the cause?
In each case, determine if the price increase is justified or if it is the result of the concept of the “invisible hand,” whereby providers of goods are increasing prices for personal gain at the expense of consumers.
Include in your comment what you have learned about Invisible Hand. Do we operate in a free market, or do certain special interests influence the market? For example, here is an excerpt from the Brennan Center for Social Justice regarding Citizens United.
“January 21, 2020, will mark a decade since the Supreme Court’s ruling in Citizens United v. Federal Election Commission, a controversial decision that reversed century-old campaign finance restrictions and enabled corporations and other outside groups to spend unlimited funds on elections.”
Note: The invisible hand is a metaphor for the unseen forces that move the free market economy. Through individual self-interest and freedom of production and consumption, the best interest of society as a whole is fulfilled (Majaski, 2022).
Discuss with at least two of your classmates what you discovered.
References:
Statistics Explained (2023, November). Retrieved December 19, 2023.
Majaski, C. (2022, February 23). Invisible Hand. Investopedia
Current US inflation rates: 2000-2023: US inflation calculator. US Inflation Calculator. (2023, February 14). Retrieved February 17, 2023.
Thomsen, I. (2022, August 9). What is greedflation – and is it driving higher prices? Northeastern Global News. Retrieved February 17, 2023.
TRADING ECONOMICS. (n.d.). United States inflation rate. Retrieved December 20, 2023.
Reuter, D. and Kiersz, A. (2021). Corporations are using inflation as an excuse to raise prices and make fatter profits – and it’s making the problem worse. Insider.
Answer preview for Price Inflation
APA
300 Words