Inflation has been the major economic problem that Latin America has faced in the past century. Inflation is when the currency of a country is losing value, and the price of goods is increasing. In Latin America's case inflation came into play when the governments of Latin American countries were spending money they didn't have, and deficits grew and grew. So they could keep spending money, the governments would print more money, and used this newly printed money to finance the various programs they had in action, and one's about to get going. By using newly printed money to finance these programs that just added more and more currency in circulation. This made the worth of the currency decline and decline. Also when you increase the money supply the price of goods rises, and since money was losing value the price of goods will increase due to that too.
             With this inflationary spiral as a major part of the Latin American economic landscape, the government's efforts to control inflation often failed. What many believed was a solution was to increase wages due to higher prices. To help fund higher wages governments were printing up more and more money, the governments also kept to their commitment the public sector spending which made the deficit grow. Economists have said the only way to get inflation under control was to stabilize the economy. To do that governments need to cut out deficit spending, decrease their debts, and lower tax rates, which will, in turn, promote more people to spend money. If the tax rate is at the proper level the government will be collecting more money at a lower tax rate, than it would if there was a high tax rate. Which means that the governments can get out of debt quicker. What governments could do is to sell bonds to take money out of circulation. That could in turn slow down how quickly!
             inflation is growing, that would decrease the money supply and
             A good example of a country attacking inf...