This document defines inflation as a sustained increase in price levels or decrease in the value of money. Inflation occurs when the currency supply exceeds production levels. It discusses different types of inflation like open, suppressed, galloping, and hyper inflation. Causes of inflation include increased money supply, income, deficit financing, and foreign reserves. Effects are inefficiencies, uncertainty, negative trade impacts, and higher taxes. Inflation is measured by changes in consumer and producer price indexes. Ways to control inflation discussed are monetary policies like credit and currency controls, fiscal policies like spending cuts and tax increases, and other measures like boosting production and implementing price controls.

2. Introduction
Inflation is define das a sustained
increase in the price level or fall in the
value of money.
When the level of currency of a country
exceeds the level of production, inflation
occurs.
Value of money depreciates with the
occurrence of inflation.

3. DEFINITION
• According to C. Crowther, “Inflation is state in
which the value of money is falling and the
Prices are rising.”
• In Economics, the word “Inflation” refers to
General rise in prices measured against a
standard level of purchasing power.

4. Types of Inflation
Open Inflation
Suppressed Inflation
Galloping Inflation
Creeping Inflation
Hyper Inflation

5. Causes Of Inflation
 Increase in money supply
 Increase in disposable income
 Deficit financing
 Foreign exchange reserves
FACTORS ON DEMAND SIDE :

6.  Rise in administered prices
Erratic agriculture growth
Agricultural price policy
Inadequate industrial growth
FACTORS ON SUPPLY SIDE :

7. Effects of Inflation :
 They add inefficiencies in the market, and
make it difficult for companies to budget or
plan long-term.
 Uncertainly about the future purchasing power
of money discourages investment and saving.
 There can also be negative impacts to trade
from an increased instability in currency
exchange prices caused by unpredictable
inflation.
 Higher Income Tax rate.

8. How is Inflation measured ?
A measure of price changes
in consumer goods and
services such as gasoline,
food, clothing and
automobiles. The CPI
measures
The 2 way of measuring Inflation are :-
 CPI (Consumer Price Index)
 PPI (Producer Price Index)
CPI PPI
A family of indexes that
measure the average
change over time in
selling prices by the
domestic producers of
goods and services. PPIs
measure price changes
from the perspective of
the seller.

9. Consequences of Inflation
 Adverse effect on production.
 Adverse effect on distribution of income.
 Obstacle to development.
 Changes in relative prices.
 Adverse effect on the B.O.P.

10. Measures of Inflation
1. Monetary Policy
• Credit Control
• Demonetization of currency
• Issue of New Currency
2. Fiscal Policy
• Reduction in Unnecessary Expenditure
• Increase in taxes
• Increase in savings
• Surplus Budget
• Public debts
3. Other Measures
• To Increase production
• Rational Wage Policy
• Price Control

11. THANK YOU