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"Black Money is a cause of Inflation" Explain.
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Answer:
That is what happens when black money causes inflation. ... Black money is generated through corrupt activities like bribes, and “cuts” paid to officials, hoarding and selling commodities at more than market prices, and tax evasion.
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"Black Money is a cause of Inflation"
Basically, inflation is the rise in the price of the commodity that means the value of the money is very low. If I explain this in simple word inflation means the presence of money in the market but not the services and commodities.
Inflation occurs when the demand and the product cost of the product or services increases. Which affect the average wages people who can't afford the services in the same amount from which they are availing it earlier.
There are so many causes of inflation:
- Black Money
- High Production Cost
- High Demand
- Lack of services
Black Money means people have currency but the government has not any record of it. So they use it to get the services of that money ultimately the demand will get increase and we all know that when the demand increases the price of the product or the service will increase and that is the inflation only.