Inflation ppt

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Inflation ppt

  1. 2. <ul><li>“ Inflation is too much of money chasing to few goods.” – Coulbourn. </li></ul><ul><li>“ Inflation occurs when the general level of prices and cost is rising.” </li></ul><ul><li>– Prof. Samuelson. </li></ul><ul><li>“ Inflation as a sustain raise in price.” – Harry Johnson. </li></ul><ul><li>“ Inflation is the process of price increase.” – Prof. Rowan. </li></ul><ul><li>Thus, Inflation refers to – </li></ul><ul><li>“ a rise in the general price level and a corresponding fall in the value of money over a period of time.” </li></ul><ul><li>“ It is a state in which the value of money is falling i.e. prices are rising.” </li></ul><ul><li>  </li></ul>
  2. 3. <ul><li>It is a Long term process. </li></ul><ul><li>It is Dynamic in nature. </li></ul><ul><li>It is State of Disequilibrium. </li></ul><ul><li>It is Pure monetary phenomenon. </li></ul><ul><li>It is Indigenous to the economic system. </li></ul><ul><li>It is Fostered by economic factors. </li></ul><ul><li>It is Post full employment phenomenon. </li></ul><ul><li>It is Rising trend in price. </li></ul><ul><li>It is Self generating. </li></ul><ul><li>It involves Scarcity. </li></ul><ul><li>Inflation is of different types e.g. Open, Suppress, Creeping , Galloping & Hyper. </li></ul><ul><li>There are different theories about inflation e.g. The Quantity theory, The Cost – Push Theory, Expectation Theory, Keynesian Theory. </li></ul><ul><li>Inflation is governed by Demand and Supply related factors. </li></ul><ul><li>Inflation has impact on economic on Economic, Social & Political situation. </li></ul><ul><li>Inflation can be controlled by various measures like Monetary policy, Fiscal policy, Wage & Price Control, Indexation and Stagflation. </li></ul>
  3. 4. <ul><li>Formula </li></ul><ul><li>P (t) = AP (t) x 100 </li></ul><ul><li>P (T-1) </li></ul><ul><li>Where, </li></ul><ul><li>P= Price low level </li></ul><ul><li>t and t-1 are the time periods. </li></ul>
  4. 6. <ul><li>Quantity Theory/ Demand – Pull Inflation </li></ul><ul><li>2. Keynesian Theory </li></ul><ul><li>3. Cost push Theory </li></ul><ul><li>4. Expectation Theory </li></ul>
  5. 7. <ul><ul><li>Factors Affecting Prices on the Demand Side - </li></ul></ul><ul><ul><li>Rapid Growth of Population. </li></ul></ul><ul><ul><li>Rise in Incomes. </li></ul></ul><ul><ul><li>Mounting Government Expenditure . </li></ul></ul><ul><ul><li>Deficit Financing </li></ul></ul><ul><ul><li>Role of Black Money </li></ul></ul><ul><li>© </li></ul><ul><ul><li>Factors Affecting Prices on the Supply Side - </li></ul></ul><ul><ul><li>Increase in money supply </li></ul></ul><ul><ul><li>Erratic Agricultural Growth </li></ul></ul><ul><ul><li>Inadequate Rise in Industrial Production </li></ul></ul><ul><ul><li>Hoarding </li></ul></ul><ul><ul><li>Agriculture Price Policy of the Government </li></ul></ul><ul><ul><li>Rise in Administered Prices </li></ul></ul><ul><ul><li>Heavy Taxation </li></ul></ul><ul><ul><li>Exports and Imports </li></ul></ul>
  6. 8. A) Economic Effects Production Distribution Foreign Trade Other <ul><li>Stimulation Effect. </li></ul><ul><li>Loss to Fixed Income Group. </li></ul><ul><li>Decline in Exports. </li></ul><ul><li>Decline in Savings </li></ul><ul><li>Disastrous Effect. </li></ul><ul><li>Loss to Business community. </li></ul><ul><li>Increase in Imports. </li></ul><ul><li>Affects Planning </li></ul><ul><li>Speculation, Hoarding & Black Marketing </li></ul><ul><li>Loss to Debtors and creditors. </li></ul><ul><li>Conspicuous Consumption </li></ul><ul><li>Resource Misallocation </li></ul><ul><li>Loss to Investors. </li></ul><ul><li>Distortion of Budget & Vicious Cycle. </li></ul><ul><li>Seller’s Market </li></ul><ul><li>Loss to Farmers. </li></ul><ul><li>Fall in Exchange Rate </li></ul><ul><li>Flight of Capital. </li></ul><ul><li>Lowering of International Competitiveness. </li></ul><ul><li>Disincentive Effect. </li></ul>B) Socio – Political Effects
  7. 9. <ul><li>Monetary Policy </li></ul><ul><li>Fiscal Policy </li></ul><ul><li>Wage Control </li></ul><ul><li>Price Control </li></ul><ul><li>Indexation </li></ul>
  8. 10. <ul><li>Rishikesh Garude 01 </li></ul><ul><li>Rutika Dani 02 </li></ul><ul><li>Sagar Palse 04 </li></ul><ul><li>Saima Shaikh 07 </li></ul><ul><li>Achal Sakore 08 </li></ul><ul><li>Nayan Punj 32 </li></ul>

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