Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. There are different types of inflation including wage inflation, pricing power inflation, and sectoral inflation. Inflation is caused by factors like excess money supply, increases in production costs, government borrowing, and demand-pull. High inflation can negatively impact economies by raising import prices, lowering savings, redistributing wealth, and discouraging investment. Governments use monetary and fiscal policies like interest rate adjustments, credit control, and public spending changes to control inflation.

1. Effort by :
Dumasia Yazad H.
Computer (Shift-1) 2nd year

4. Meaningand
Definitions
TypesofInflation
Causeofinflation
EffectsofInflation
ControlMeasures

5. Definitions :
 “Inflationisanincreaseinthequantityof
purchasingpower.”–Gregory
 Inflationisthestageoftoomuchmoney
chasingtoofewgoods.”--Coulbourn
Meaning :
 Inflationisconsideredaglobal
phenomenon.Ittakesplacebecauseof
rapidlyrisingpricesofgoodsandservices,
resultinginthedeclineofthevalueofmoney.
 Therateatwhichthegenerallevelofprices
forgoodsandservicesisrising,and,
subsequently,purchasingpowerisfalling.
 InEconomics,theWordinflation refersto
GeneralriseinPricesMeasuredagainsta
StandardLevelofPurchasingPower.

6. 1. Wage Inflation :
Wage inflation is also called
as demand-pull or excess
demand inflation. This type
of inflation occurs when
total demand for goods and
services in an economy
exceeds the supply of the
same.

7. 2.Pricing Power Inflation :
Pricing power inflation is more often called as
administered price inflation. This type of inflation
occurs when the business houses and industries
decide to increase the price of their respective goods
and services to increase their profit margins.

8. 3.Sectoral Inflation:
This is the major type of inflation. The sectoral
inflation takes place when there is an increase in
the price of the goods and services produced by a
certain sector of industries. For instance, an
increase in the cost of crude oil would directly
affect all the other sectors, which are directly
related to the oil industry.

9. Inflation is caused due to several economic factors:
 When the government of a country print money in excess,
prices increase to keep up with the increase in currency,
leading to inflation.
 Increase in production and labor costs, have a direct impact
on the price of the final product, resulting in inflation.

10.  When countries borrow money, they have to cope with the
interestburden.Thisinterestburdenresultsininflation.
 Hightaxesonconsumerproducts,canalsoleadtoinflation.
 Demands pull inflation, wherein the economy demands
moregoodsandservicesthanwhatisproduced.
 Cost push inflation or supply shock inflation, wherein non
availabilityofacommoditywouldleadtoincreaseinprices

11. Effect depends on the speed of
inflation and the nature of the
economy.
 Rising prices of imports
 Lowers national saving
 Redistribution of Income &
Wealth
 Collapse of Monetary system
 Adverse impact socially and
politically
 Discourages Investment &
savings
 Higher Interest / Income tax
rates

12. • DEBTORS
• ENTREPRENEURS
• FARMERS
• UPPER INCOME
GROUPS
BENEFITS
• CREDITORS
• FIXED INCOME
GROUPS
• CONSUMERS
• MIDDLE AND
LOWER INCOME
GROUPS
LOSES

15. ≈ Monetary policy :
Monetary policy can control the growth of demand through an
increase in interest rates and a contraction in the real money
supply.
Something like
a. Credit Control
b. Demonetization of Currency
c. Issue of New Currency
≈ Fixed exchange rates: like
a. Reduction in Unnecessary Expenditure
b. Increase in Savings
c. Surplus Budgets
d. Public Debt
≈ Gold standard
≈ Wage and price controls
≈ Cost-of-living allowance

17. ITEM RICE PETROL
INFLATION
RATE
5% 7% 5% 7%
POOR 5K 3K 5L 3L
MIDDLE 5K 4K 5L 4L
RICH 5K 5K 5L 5L

19. Country Inflation Rate
Consumer price (%)
Nepal 8.6
Turkey 8.7
Uganda 9.4
Buma 9.6
Ukraine 9.8
India 9.7

20. www.wikipedia.org
www.inflation.us
www.inflationdata.com
www.rateofinflation.com
www.tradingeconomics.com
www.hindu.com
www.businessline.com
www.deccanhearld.com
www.economywatch.com