2. GROUP MEMBERS
o AQSA BASHIR 15-ARID-1677
o AYESHA KHALID 15-ARID-1686
o RIZWANA RAMZAN 15-ARID-1778
o MEHWISH AMJAD 15-ARID-1728
3. Inflation is defined as a sustained increase in the price level
or a fall in the value of money.
When the level of currency of a country exceeds the level of
production, inflation occurs.
DEFINITION:
4. o Increase in the price of wheat
o Increase in the price of world oil
o Increase in the price of rice
o Increase in the price of CNG
EXAMPLE:
5. o Inflation is rate of change in the price level.
[(P1 - P0) / P0] x 100
MEASURING INFLATION:
6. o Open inflation
o Creeping inflation
o Hyper inflation
o Galloping inflation
TYPES OF INFLATION:
7. o A situation in which the prices of consumer goods
rise consistently.
EXAMPLE:
A situation in which food and gas prices rise, but home
prices, car prices, and art prices remain flat or drop.
1.OPEN INFLATION:
8. o Creeping inflation is defined as the circumstance
where the inflation of a nation increases gradually,
but continually, over time.
EXAMPLE:
An example of this can be seen in the United States
over the last couple of decades as pricing power of
the dollar continues to decline.
2.CREEPING INFLATION
9. o Hyperinflation occurs when a country experiences
very high and usually accelerating rates of inflation.
EXAMPLE:
In Yugoslavia prices increased by 5 quadrillion per cent
between October 1, 1993, and January 24, 1995
3.HYPER INFLATION:
10. o Very Rapid Inflation which is almost impossible to
reduce.
4.GALLOPING INFLATION:
11. There are two causes of inflation :
o Demand pull inflation
o Cost push inflation
CAUSES OF INFLATION:
12. o This type of
inflation happens
when the
aggregate demand
increases more
than the supply
1.DEMAND PULL:
13. o When cost of
production
increases the
price level
automatically
increases.
2.COST PUSH INFLATION:
14. There are two policies in which governments try to
measure inflation. These are:
o Fiscal policy.
o Monetary policy.
MEASURES OF INFLATION:
15. o Credit Control
o Demonetization of Currency
o Issue of New Currency
1.MONETARY POLICY:
16. o Reduction in Unnecessary Expenditure
o Increase in Taxes
o Increase in Savings
o Surplus Budgets
o Public Debt
2.FACIAL POLICY:
