Relationship of Inflation and the Shortage in Venezuela Test ( 1 part of 2)

It is appropriate to contrast the shortage and inflation of a country, since both go hand in hand with the recess and under development of it. According to a previous investigation, it seeks to make known in this essay how the high price indexes affect the phenomenon "cause and effect" of the shortage of products in the economic circuit of a nation, especially the goods and basic services that affect the satisfaction of the mandatory needs with which the State must comply with the population, who demand the needs.

In this same order and direction, an evaluation is required of how this economic indicator known as inflation, grows and decreases in an economy and the effect that this generates for the social conglomerate; and for the purposes of this as it is involved with regard to shortages, this being an important indicator in the stability of both the State Government and the same Nation as this legislation; emphasizing the current situation in the country of Venezuela.

Having made the previous observation of the objective to be achieved, we can say that inflation is a phenomenon of care and importance, since its fluctuations can be of great impact for the good economic and financial exercise of a country, as well as the political bankruptcy of Government management. This can affect both the consumer demand and the producer's offer in the market, as well as the high production costs; the economic structure being directly affected, since there will be more existence of imperfect markets, which fix the price premiums for goods and services; the opposite to the free competition markets.

In the same sense, the financial environment of a country, the high variations of inflation results in the purchasing loss of the currency, therefore, the population before the imminent fear of losses, prefer to convert their liquid assets into non-monetary assets or real estate, with the purpose that the readjustment and re-expression of assets and assets recorded in the different financial statements, can be adapted to the current economy in which it operates, without losing their value due to the inflationary phenomenon; on the contrary, that the sale of some good can give way to the obtaining of another good or service without having to incur in greater expenses.

According to this, lies the fact of this essay that will offer certain information on how to identify the relationship between the shortage of products and the phenomenon of inflation, both of which are currently the protagonists of Venezuela's economic, political and social imbalance.

In reference to the above, inflation is defined according to Enrique Congrains Martin as a

 "phenomenon characterized by the persistent and sustained rise in the general level of prices ..." 

means then that inflation is the increase in the price of goods and services of a market, knowing that according to the latest economic data provided by the Central Bank of Venezuela, currently the Venezuelan State is in a galloping type inflation - hyperinflation that is affecting the purchasing power of the currency and that lack of support for it, inorganic bills are being developed that aggravate this economic phenomenon much more. The Venezuelan today when he goes to the market to meet their demand for needs is achieved with the shortage of products that are in different markets of free competition, but in turn, is with the black market that is supported by little or much of these products but at a very high price; This results in people acquiring less goods and products and injecting much more money into the economy. In the end this affects the shortage of products through price speculation