Inflation is an economic condition in that prices for consumer goods 79. ______
increase, and the value of money or purchasing power decrease. There are three 80. ______
important causes of inflation. The first and most important cause may be
excessively government spending. For example, in order to finance a war or 81. ______
carry on social programs, the government may spend more money than it 82. ______
has received through taxes and other revenues, thus creating a deficit. In 83. ______
order to offset this deficit, the Treasury Department can simply expand the
money supply for issuing more paper money supply to return debts of 84. ______
government. This increase in the money supply will cause the value of the
dollar automatically decrease. The second cause of inflation will occur when 85. ______
the money supply increases faster than the supply of goods. If people have
more money, they will run out to buy such popular goods like televisions and 86. ______
computers, and a shortage wilt be the result. Industry will then produce more,
at higher prices, to satisfy with the demand. Finally, if abor unions demand 87. ______
that workers' wages are increased to suit the high cost of living, industry will 88. ______
meet this demand and add other costs of production on the consumer.