ABSTRACT
This research work is an attempt to find out some basic facts about people’s attitudes toward implication of inflation on the Nigeria economy. The aim of writing this project is to satisfy a pre-condition for the award of Diploma in Public Administration. It is also intended to highlight control of inflation on the Nigeria economy. This can be achieved when Nigeria government control inflation on the Nigeria economy. The study is not exhaustive owing to the time and financial constraint encountered in the course of carrying out the research works. However, the researcher tried to highlight the major aspects of the scope and objectives of the study in a way it could provide an input to develop deeper analysis. This work has been grouped into five chapters, beginning with chapter one which acts as an introduction to the study. The second chapter reviews related literature, while chapter three deals with the methods of data collection. With necessary data gathered, the researcher presented and analysed the data in chapter four. In chapter five, summary was made, conclusion drawn and recommendations advanced based on the subject matter.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
One cannot take about inflation direct reference to money. Money has to do with anything which by law and custom is commonly accepted in payment for goods and services or for the settlement of debt. In the modern world, specialization and division of labour has necessitated the use of an acceptable medium of exchange. Living is earned by indirectly producing goods and services for other people and receiving goods and services from others in return. Money is necessary fore specialization and specialization is the basis of high standard of living. However, the value of money determines both specialization as well as the standard of living. Among the characteristics of money are that it must be relatively scarce and sustain stability of value. The use of money expected to provide a convenient way of storing wealth. For instance, one can sell goods today and store the money until when needed. If prices are stable, then one knows exactly how much command over real goods and services has been stored up when certain sum of money has been accumulated. If prices change rapidly, then one has little idea how many goods one will be able to command when previously accumulated money is spent.
Clearly, then, rapid fluctuations in general level of prices reduce the usefulness of money as a store of value. To an economist, then, money is like any other commodity, though with its special characteristics, its supply and demand must interact to give what is called equilibrium. A position of equilibrium for any commodity including money is reached when the quantity demanded is equal to quantity supplied. Whenever there is a disequilibrium between supply and demand, an inflationary situation many may arise.
1.2 STATEMENT OF THE PROBLEM
It is observed that the value of money is affected either positively or negatively during inflationary period. In inflationary situation there is disequilibrium between the supply and the demand for money. It is either that a unit of money can buy less or more quantity of goods. It is then realized that the value of money does not remain stable for long, the general price level is invariably either rising or less frequently falling. It is either that the people are spending at a rate greater or less than the available goods and services. Three things are now clear; namely.
(a) An increase in the volume of money and credit,
(b) The increase exceed available goods and services and
(c) The increase should lead to a substantial and continuing rise in the general price level. These are all the situations in the Nigerian economy and hence necessitating the desire to undergo the study in order to find out the implication of inflation on the Nigerian economy.
1.3 OBJECTIVE OF THE STUDY
In an inflationary situation, like Nigeria is currently experiencing, there is disequilibrium between the supply and demand for money. A situation where a unit of money can buy less quantity of goods resulting from increase in the volume of money and credit, the said increase exceeding the available goods and services as well as leading to a substantial and continuing rise in the general price level. The objective of the study is therefore to determine the merits and demerits of an inflation to the Nigerian economy. In addition, to determine the prospects of improving the issues of inflation in the country. Finally, to see if the government could improve upon or otherwise the principles of inflation.
1.4 SIGNIFICANCE OF THE STUDY
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