EDURYNUS

Inflation is the biggest fear of anyone in any country. The prices of the goods and commodities are not any more same as they were few years back, either it be LPGs, food products, petroleum products or any other products.  It is stated that the one of reason for the rising prices or inflation could be liquidity of funds in people's hand. The more money people will have they'll tend to create more demand in the market and as the demand will increase it will automatically cause the prices to increase. Liquidity or the money supply in the market is controlled or increased by the government with the help of monetary policy.  Monetary policy is adopted by a nation to control the money supply often as an attempt to reduce inflation.  So to understand that how liquidity is affecting or being the biggest enemy of inflation we'll have to understand how liquidity or the money supply increases in the market. Liquidity is controlled by the help of various tools of monetary policy. L...

The concept demand  refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a given period of time. Determinants of demand 1. Price of the commodity Generally with increase in the  price of a commodity consumer tends to demand lesser units and with decrease in the price of commodity consumer tends to demand greater units of a commodity. Therefore the demand of is inversely related to its price. 2. Price of related goods  They are of two types:  (a) Substitute goods-        When two commodities can be used in         place of one another with ease are               called substitute goods. Increase in             price of one substitute good results in         increase demand of other substitute.        There is a direct or positive relation...