The equation of exchange, MV?PQ, seems to readily explain inflation. Why is infl

Question

The equation of exchange, MV?PQ, seems to readily explain inflation. Why is inflation such a difficult problem in so many economies? Do some research to find an industry or firm, either now or in the past, that was affected by inflation. In your initial post, write a brief synopsis of the situation and how they reacted to it. As an engineer, you may find it interesting to compare what countries receive large business and manufacturing investments vs. those that do not. Note that there are also other considerations beyond inflation concerns.

Explanation / Answer

Inflation is the continuous rise in the price of the commodities year after year.It is a difficult problem because as the price rises, the commodity becomes more expensive and thus its demand comes down. As a result the entire economy gets affected.

Few economies face inflation and experience high rise in the price of the commodities. As a result the demand declines and there is much of unsold inventory leading to decline of the economy.

Few years back the automobile industry got affected due to rise in the price of the fuel. The demand of automobile declines and thus people switch from petrol driven to electric cars and thus the car market got affected. Thus most of the automobile companies,switched from petrol driven cars to hybrid cars.

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