Nidhi ppt

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Nidhi ppt

  1. 1. INFLATION<br />
  2. 2. Learning the basics of DEMAND and SUPPLY through Calvin and Hobbes<br />
  3. 3. WHAT IS INFLATION ?<br /><ul><li> It can be defined as the “as a rise in the general price level and therefore a fall in the value of money.”
  4. 4. Inflation is a rise in the general level of prices of goods and services over time. "Inflation" is used to refer to a rise in the prices of some specific set of goods or services, as in "commodities inflation".
  5. 5. Inflation is a rise in the general level of prices of goods and services over time. "Inflation" is used to refer to a rise in the prices of some specific set of goods or services, as in "commodities inflation".
  6. 6. Inflation is a rise in the general level of prices of goods and services over time. "Inflation" is used to refer to a rise in the prices of some specific set of goods or services, as in "commodities inflation".
  7. 7. Inflation is a rise in the general level of prices of goods and services over time. "Inflation" is used to refer to a rise in the prices of some specific set of goods or services, as in "commodities inflation". </li></li></ul><li>Factors affecting inflation<br /><ul><li> Increase in the money supply.
  8. 8. Decrease in the demand for money.
  9. 9. Decrease in the aggregate supply of goods and services.
  10. 10. Increase in the aggregate demand for goods and services.</li></li></ul><li>How is inflation Measured ?<br />The 2 ways of measuring inflation<br />
  11. 11. Types of Inflations<br /><ul><li> Creeping inflation
  12. 12. Trotting inflation
  13. 13. Galloping inflation
  14. 14. Hyper inflation
  15. 15. Monetary inflation
  16. 16. Structural inflation
  17. 17. Imported inflation</li></li></ul><li>Two Major Types Of Inflations<br />
  18. 18.
  19. 19. Inflation affecting the Common Man<br />
  20. 20.
  21. 21. Problems Due to Inflations<br /><ul><li>When the balance between supply and demand goes out of control, consumers could change their buying habits, forcing manufacturers to cut down production.
  22. 22. The mortgage crisis of 2007 in USA could best illustrate the ill effects of inflation. Housing prices increases substantially from 2002 onwards, resulting in a dramatic decrease in demand.
  23. 23. Inflation can create major problems in the economy. Price increase can worsen the poverty affecting low income household,Inflation creates economic uncertainty and is a dampener to the investment climate slowing growth and finally it reduce savings and thereby consumption.
  24. 24. The producers would not be able to control the cost of raw material and labor and hence the price of the final product. This could result in less profit or in some extreme case no profit, forcing them out of business.
  25. 25. Manufacturers would not have an incentive to invest in new equipment and new technology.
  26. 26. Uncertainty would force people to withdraw money from the bank and convert it into product with long lasting value like gold, artifacts.</li></li></ul><li>High Inflation may lead the country to lower economic growth<br />
  27. 27. What is<br />Real Return <br />& <br />How INFLATION <br />Eats Your Money<br />
  28. 28. Between 1950-1960<br />The inflation on an average was at 2.00%<br />Between 1960-1970<br />The inflation on an average was at 7.2%<br />Between 1970-1980<br />The inflation on an average was at 8.5%.<br />
  29. 29.
  30. 30. Historical perspective of growth and Inflation in India<br />
  31. 31. Explaining India’s Inflation Story<br />
  32. 32. The interaction between interest rates<br />Exchange Rates & Inflation<br />
  33. 33. Measures taken to control inflation <br />Monetary measures<br /><ul><li> Credit control
  34. 34. Demonetization of currency
  35. 35. Issue of new currency
  36. 36. Reduction in unnecessary expenditure
  37. 37. Increase in taxes
  38. 38. Increase in savings
  39. 39. Surplus budgets
  40. 40. Public debt</li></ul>Fiscal measures<br /><ul><li> To increase production
  41. 41. Rational wage policy
  42. 42. Price control
  43. 43. Rationing</li></ul>Fiscal measures<br />
  44. 44. Food inflation<br />
  45. 45. What Drives Food Inflations<br />Since the 1970s, food production has become increasingly globalized and concentrated. A handful of countries dominate the global trade in staple foods. 80% of wheat exports come from six exporters, as does 85% of rice. Three countries produce 70% of exported corn. This leaves the world's poorest countries, the ones that must import food to survive, at the mercy of economic trends and policies in those few exporting companies. When the global food trade system stops delivering, it's the poor who pay the price. <br />For several years, the global trade in staple foods has been heading towards a crisis. Four related trends have slowed production growth and pushed prices up. <br /><ul><li> The End of the GreenRevolution
  46. 46. Climate Change
  47. 47. Agrofuels
  48. 48. Oil Prices</li></li></ul><li>Food inflation trends<br />
  49. 49. Impact of Food Inflation on Indian consumers<br />
  50. 50. What is causing global food inflation ?<br /><ul><li> Newspapers have cited an internal World Bank document as having found that 75% of the price increase was due to biofuels.
  51. 51. Several governments and commentators see speculation as a major driving force.
  52. 52. A widely held view has it that rapidly growing food demand in the emerging economies is pushing up global food prices.</li></li></ul><li>Causes and Consequences of Food Price Behaviour and it s counter attack<br />
  53. 53. Fuel Hike and Gold<br />
  54. 54. Global Inflation<br />GLOBAL INFLATION<br />
  55. 55.
  56. 56. Global inflation and India <br />
  57. 57. US Food Inflation Spiralling out of control<br />
  58. 58. Recent Articles<br />
  59. 59. Common Man <br />

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