Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

inflation rate


Published on

from Tooba

Published in: Business, Economy & Finance
  • Be the first to comment

inflation rate

  2. 2. PRESENTATION PLAN <ul><li>Introduction. </li></ul><ul><li>Effects on Economy. </li></ul><ul><li>Other Terms. </li></ul><ul><li>Types of Inflation. </li></ul><ul><li>Reasons of Inflation. </li></ul><ul><li>Measures to Control Inflation . </li></ul><ul><li>Conclusion. </li></ul>
  3. 3. INTRODUCTION…… “ Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.”
  4. 4. EFFECTS ON ECONOMY … <ul><li>GENERAL EFFECT </li></ul><ul><li>NEGATIVE EFFECT </li></ul><ul><li>POSITIVE EFFECT </li></ul>
  5. 5. GENERAL EFFECT <ul><li>An increase in the general level of </li></ul><ul><li>prices implies a decrease in the </li></ul><ul><li>purchasing power of the currency. </li></ul>
  6. 6. NEGATIVE EFFECT <ul><li>High or unpredictable inflation rates are regarded as harmful to an overall economy. </li></ul><ul><li>Negative effects of inflation include a decrease in the real value of money and other monetary items over time. </li></ul>
  7. 7. POSITIVE EFFECT… <ul><li>Positive effects include a mitigation of </li></ul><ul><li>economic recession, and debt relief by </li></ul><ul><li>reducing the real level of debt. </li></ul>
  8. 8. OTHER TERMS …. <ul><li>DISINFLATION – the reduction of rate of inflation . </li></ul><ul><li>HYPERINFLATION-an out of control inflationary spiral . </li></ul><ul><li>STAGFLATION – high inflation combined with economic stagnation and unemployment. </li></ul>
  9. 9. TYPES OF INFLATION.. <ul><li>Demand pull Inflation . </li></ul><ul><li>Cost push theory . </li></ul><ul><li>Pricing power Inflation . </li></ul><ul><li>Sectoral Inflation . </li></ul>
  10. 10. DEMAND PULL INFLATION.. <ul><li>It is caused by increases in aggregate demand due to increased private and government spending. </li></ul>
  11. 11. COST PUSH THEORY.. <ul><li>It is also called “supply shock inflation”, is caused by a drop aggregate supply . </li></ul><ul><li>This may due to natural disasters , or increased prices of inputs.. </li></ul>
  12. 12. PRICING POWER INFLATION. <ul><li>Pricing Power Inflation is more often called as administered price Inflation.. </li></ul><ul><li>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. </li></ul>
  13. 13. SECTORAL INFLATION… <ul><li>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 … </li></ul>
  14. 14. REASONS OF INFLATION <ul><li>Lack of balance in the country’s budget. </li></ul><ul><li>Financial problem, financing the deficit of money by printing. </li></ul><ul><li>Sudden increase in production costs. </li></ul><ul><li>Significant increase in the level of energy resources. </li></ul><ul><li>Faulty structure of the economy . </li></ul><ul><li>Exported goods far exceeding imported ones. </li></ul><ul><li>Too many monopolies in the economy. </li></ul><ul><li>Imported Inflation . </li></ul><ul><li>Problems with financial planning. </li></ul>
  15. 16. MEASURES TO CONTROL INFLATION… <ul><li>MONETARY POLICY </li></ul><ul><li>FISCAL POLICY </li></ul><ul><li>OTHER MEASURES </li></ul>
  16. 17. MONETARY POLICY… <ul><li>It aims at reducing money supply in the market. </li></ul><ul><li>CREDIT CONTROL </li></ul><ul><li>ISSUE OF NEW CURRENCY </li></ul>
  17. 18. FISCAL POLICY.. <ul><li>It Majorly pertains to taxation and interest policies . </li></ul><ul><li>REDUCTION IN UNNECESSARY EXPENDITURE </li></ul><ul><li>INCREASE IN TAX </li></ul><ul><li>INCREASE IN SAVING </li></ul><ul><li>SURPLUS BUDGET </li></ul><ul><li>PUBLIC DEBT </li></ul>
  18. 19. OTHER MEASURES … <ul><li>Are those which aim at increasing aggregate supply addressing aggregate demand directly… </li></ul><ul><li>INCREASE PRODUCTION. </li></ul><ul><li>RATIONALE WAGE POLICY. </li></ul><ul><li>PRICE CONTROL. </li></ul><ul><li>RATIONING. </li></ul>
  19. 20. CONCLUSION… <ul><li>From various monetary , fiscal and other measures it becomes clear that to control inflation government should adopt all measures simultaneously. </li></ul><ul><li>Inflation is like a hydra-headed monster which should be fought by using all the weapons at the command of the government. </li></ul>
  20. 21. Presented by TOOBA KHAN . ICMAP .