Essay on Inflation in Germany

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Title: Inflation in Germany Introduction: The holiday season saw a rise in the European Central Bank’s targeted inflation rates according to the German government this year. Due to increased holiday accommodation and travel and tourism costs, a 2.3% increase was witnessed in the Consumer Price Index which has led the government to undertake sharp steps such as decreasing the cutting down on interest rates, which has subsequently resulted in an economic slowdown in the Eurozone.


Discussion: Inflation is a rise in price of goods and services within an economy which results in a decline in the purchasing power of every subsequent unit of currency and this causes a loss in the real value of exchange within an economy. The main measure of inflation is the Consumer Price Index which provides an indication of the price level of consumer goods and services which are purchased by households, business firms, the government as well as the rest of the world (in case of an open economy). The CPI in the United States is defined by the Bureau of Labor Statistics as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” This paper helps to provide an insight into the inflation that is currently taking place within the German economy. As per the current happenings within the German economy, the prices of goods and services naturally saw a hike due to the holiday season; this period mostly witnesses an increase in demand of goods and services which is met by an almost equivalent amount of supply. ...
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