2. I am Punith srirama
with commerce as
my stream with the
aim of becoming
charted
accountrant .
2
3. Reason for
selection
I had classified, analysed,
interpreted amd gave suitable
suggestions to manage the
loop wholeds in my chosen
topic to bring equilibrium
point to neutralize the
excessive money flow in the
public.
Since inflation is the prime
factor for economic growth,
so I was attracted towards this
topic and it drive me to
choose inflation as my core
concept .
3
4. Inflation is the rate at which the prices for
goods and services increase. Inflation often
affects the buying capacity of consumers.
Most Central banks try to limit inflation in
order to keep their respective economies
functioning efficiently. There are certain
advantages as well as disadvantages to
inflation.
6. • The value of currency unit decreases which impacts the cost of
living in the country. When the rate of inflation is high, the cost of
living also increases, which leads to a deceleration in economic
growth.
• a healthy inflation rate (2-3%) is considered positive because it
directly results in increasing wages and corporate profitability
and maintains capital flowing in a growing economy.
6
7. • Invest in longterm
investments
• Save more
• Make balanced investments
7
8. Deflation is generally the
decline in the prices for goods
and services that occur when
the rate of inflation falls below
0%. Deflation will take place
naturally, if and when the
money supply of an economy
is limited.
DEFLATION
8
10. There are two ways to measure inflation, i.e.
Wholesale Price Index (WPI) and Consumer
Price Index (CPI). The WPI is a measure of the
average change in prices of goods in the
wholesale market or wholesale level. The CPI
is the measure of change in the retail price of
goods and services consumed by a population
of an area in a base year
10
13. RBI Measure to
manage inflation
and deflation
Repo
rate
Cash
reserve
ratio
Statutory
liquidity
ratio
Moral
suasion
14. Phases of inflation
• the acceleration phase, when “sales” say something like: “Buy
today because the price is going up 15% on Monday.” And it did
(see the late 1970s). Accordingly, people accelerate their
purchases because they come to believe prices will always be
higher in the future.
• Third, there is a “flight into goods” when people buy anything
rather than hold money. Circulation velocity rises until the
currency becomes worthless.
• America is in phase one, as economists try to understand why
people aren’t spending more. When we hit phase two, it will be
clear, but it will be too late to fix. The way to stop the
government from debauching the currency is to stop the
government from debauching the currency
14
