This document discusses inflation including its definition, causes, effects, types, and methods for controlling it. Inflation is defined as a rise in the general level of prices for goods and services over time which reduces purchasing power. The main causes are demand-pull inflation, cost-push inflation, and built-in inflation. Effects include changes to interest rates, exchange rates, unemployment, and purchasing power. Types include open vs suppressed inflation and sectoral vs comprehensive inflation. Methods for controlling inflation involve monetary policy measures like interest rates and fiscal policy measures like taxation.

1. Suf Yan Gill
23-ARID-2260

2. CONTENTS
 Introduction
 Definition
 Causes of Inflation
 Effects of Inflation
 Types of Inflation
 Inflation Ratio
 Controlling Inflation
 Conclusion

3. MEANING OF INFLATION
 In economics, inflation is a rise in the general
level of prices of goods and services in an
economy over a period of time. When the
general price level rises, each unit of currency
buys fewer goods and services

4. DEFINITIONS
• According to Webster's "An increase in the amount of
currency in circulation, resulting in a relatively sharp and
sudden fall in its value and rise in prices: it may be caused by
an increase in the volume of paper money issued or of gold
mined, or a relative increase in expenditures as when the
supply of goods fails to meet the demand”
• According to Prof. Samuelson "inflation occurs when
general level of prices & cost are rising".

5. CAUSES OF INFLATION
•Demand- pull Inflation
•Cost-push Inflation
•Built-in Inflation

6. EFFECTS OF INFLATION
• Investments
• Interest rates
• Exchange Rates
• Unemployment
• Stocks
• Decrease in Purchasing Power
• Change the allocation of Income

7. EFFECTS OF INFLATION
2023
2006
1996

8. TYPES OF INFLATION
1. On the basis of the degree of the Govt. Control
• Open Inflation
• Suppressed Inflation

9. TYPES OF INFLATION
2. On the basis of the Political Conditions
• War -Time Inflation
• PeaceTime Inflation

10. TYPES OF INFLATION
3. On the basis of the Scope
• Sectoral Inflation
• Comprehensive Inflation

11. INFLATION RATIO
Pakistan Inflation Rate
The inflation rate in Pakistan was last
reported at 29.18% in October 2023

13. CONTROLLING INFLATION
There are broadly two ways of controlling inflation
in an Economy
1) Monetary Measures
2) Fiscal Measures

14. MONETARY MEASURES
The most important and commonly used method to control inflation is
monetary policy of the Central Bank. Most central banks use high
interest rates as the traditional way to fight or prevent inflation.
Measures used to control Inflation
1) Bank Rate Policy
2) CRR
3) Open Market Operations

15. FISCAL MEASURES
Fiscal measures to control inflation include taxation, government
expenditure and public borrowings.
Fiscal Measures used to control Inflation
1) Increase inTaxes
2) Increase in Savings
3) Surplus Budgets

16. CONCLUSIONS
In reality, low inflation rate and
an upward economic growth is
never possible . Nevertheless,
low inflation rate means slow
economic growth. Whenever,
money is in excess, there is
bidding by the consumers due
to which the cost of goods
escalate.

17. REFERENCES
• www.investopedia.com/terms/i/inflation
• www.economywatch.com/inflation/causes.html
• www.scribd.com.html
• www.mysmp.com/bonds/inflation.html
• www.tradingeconomics.com/india/inflation

18. ANY QUESTIONS?