Why do undeveloped countries have much high inflation rates than developed countries?
They don’t always have higher inflation rates. In the late 70’s early 80’s the US under President Carter had an inflation rate of 14% or so. There were other countries that had a lower inflation rate. Two of the greatest factors in inflation is the amount of printed money and the unemployment rate. When governments print more money and place it into the economy improperly this devalues the existing money already in the economy. For example, say there were one thousand Swiss francs in the economy and it costs 1 franc to purchase one loaf of bread. Now the Swiss government prints another one thousand francs and spends it in the economy (pays government workers). Each franc in the economy would now be half as valuable as before – an inflation rate of 50% – and bread would cost 2 francs – twice as much. Inflation. If your economy is too strong and if unemployment rates get down below 5%, companies can’t find the workers they need from the unemployed. Companies will therefore offer more mon
