This document discusses inflation and was prepared by a group including Aqsa Bashir, Ayesha Khalid, Rizwana Ramzan, and Mehwish Amjad. It defines inflation as a sustained increase in prices or fall in a currency's value. Inflation can be caused by demand exceeding production or increased costs of goods. The document outlines types of inflation like open, creeping, hyper, and galloping inflation and discusses methods of measuring and addressing inflation through fiscal and monetary policy.

1. INFLATION

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: