types of inflation and inflationary and deflationary gap
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This document discusses different types of inflation including definitions of inflation, deflation, disinflation, and their causes. It defines inflation as a sustained increase in prices over time. Deflation is a decrease in prices, while disinflation is a slowdown in the rate of inflation. The types of inflation include hyperinflation (over 100% per year), galloping inflation (10-100%), and creeping inflation (<10%). Causes of inflation are discussed as either demand-pull inflation from too much spending, or cost-push inflation from increased costs of production. Inflationary gaps occur when current GDP is higher than potential GDP at full employment, while deflationary gaps are when demand is below full employment supply
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Inflation types and causes
Creeping inflation refers to a very low rise in prices like that of a snail or creeper. Moderate inflation occurs when prices rise moderately, while runway or galloping inflation describes rapidly rising prices at double or triple digit rates. The main theories of inflation are the quantity theory, demand pull theory, and cost push theory. The quantity theory states that too much money in the economy leads to inflation. Demand pull inflation occurs when aggregate demand increases more than supply, and cost push inflation happens when production costs rise, automatically increasing prices. Both monetary and fiscal measures can be used to reduce inflation.
Causes and effects of inflation
The document discusses the causes and effects of inflation. The main causes are demand pull, cost push, money supply, and wage-price spirals. The effects include depreciation of goods and services, a wider distribution of income gaps between classes as price increases affect groups differently, shifts in spending habits as wages adjust, and speculative spending as people buy more of goods before expected price increases.
Inflation
This document defines inflation and discusses its causes and types. Inflation is defined as a sustained increase in prices and fall in the value of money. The main causes of inflation discussed are an increase in the money supply, rising national debt, demand-pull effect, and cost-push effect. Types of inflation include creeping (under 10% annually), walking (over creeping but under 5%), running (over 10% annually) and galloping (over 25%). Inflation can also be defined based on its inducements, such as deficit, wages, profits, scarcity, currency fluctuations, specific economic sectors, foreign trade, and wartime conditions.
Philips curve
The Philip curve shows an inverse relationship between the rate of unemployment and the rate of change in money wages in the short run. Friedman argued that in the long run, there is no tradeoff between inflation and unemployment - the Philip curve becomes vertical at the natural rate of unemployment, which is the rate where expected and actual inflation are equal. Temporary reductions in unemployment below the natural rate are only possible if inflation rises above expectations, but eventually expectations will adjust and unemployment will return to the natural rate, even as inflation accelerates.
Theories of inflation
This document discusses different theories of inflation including:
1) Monetarist theory which links inflation to increases in the money supply.
2) Keynesian theory which attributes inflation to increases in aggregate demand beyond what aggregate supply can meet at full employment.
3) Structural theory which sees inflation as caused by inelasticities in an economy's production capacity, capital formation, institutions, agriculture sector, and labor markets.
Philip's Curve
The Phillips curve describes an inverse relationship between unemployment and inflation, such that lower unemployment is associated with higher inflation. While observed to be stable in the short-run, it does not hold in the long-run. The document discusses the origins of the Phillips curve from William Phillips' 1958 paper and subsequent modifications by economists like Friedman and Phelps who argued it does not reflect long-run economic realities. It also examines shifts to the Phillips curve from supply shocks and how the relationship between unemployment and inflation is now understood with incorporation of inflation expectations.
Inflation and its theories
The document discusses different theories of inflation including demand-pull inflation, cost-push inflation, and structural theories of inflation. Demand-pull inflation occurs when there is excess demand in the economy causing businesses to raise prices. Cost-push inflation results from increasing costs of production such as higher wages or material costs. Structural theories cite bottlenecks in areas like agriculture, government resources, and foreign exchange that create imbalances leading to price increases. The document also outlines causes, effects, and measures to control inflation including monetary, fiscal and other policies.
Consumption function
The document discusses the consumption function, which models the relationship between total consumption and national income. Consumption is defined as an increasing function of income. The average propensity to consume (APC) is the ratio of consumption to income and declines as income rises. The marginal propensity to consume (MPC) is the change in consumption from a change in income and is assumed to be positive but less than 1. Keynes' psychological law of consumption states that consumption increases less than proportionately to increases in income. Determinants of consumption include subjective psychological factors as well as objective factors like wages, fiscal policy, and interest rates. Theories like Duesenberry's relative income hypothesis model consumption as interdependent and influenced by social
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Inflation types and causes
Creeping inflation refers to a very low rise in prices like that of a snail or creeper. Moderate inflation occurs when prices rise moderately, while runway or galloping inflation describes rapidly rising prices at double or triple digit rates. The main theories of inflation are the quantity theory, demand pull theory, and cost push theory. The quantity theory states that too much money in the economy leads to inflation. Demand pull inflation occurs when aggregate demand increases more than supply, and cost push inflation happens when production costs rise, automatically increasing prices. Both monetary and fiscal measures can be used to reduce inflation.
Causes and effects of inflation
The document discusses the causes and effects of inflation. The main causes are demand pull, cost push, money supply, and wage-price spirals. The effects include depreciation of goods and services, a wider distribution of income gaps between classes as price increases affect groups differently, shifts in spending habits as wages adjust, and speculative spending as people buy more of goods before expected price increases.
Inflation
This document defines inflation and discusses its causes and types. Inflation is defined as a sustained increase in prices and fall in the value of money. The main causes of inflation discussed are an increase in the money supply, rising national debt, demand-pull effect, and cost-push effect. Types of inflation include creeping (under 10% annually), walking (over creeping but under 5%), running (over 10% annually) and galloping (over 25%). Inflation can also be defined based on its inducements, such as deficit, wages, profits, scarcity, currency fluctuations, specific economic sectors, foreign trade, and wartime conditions.
Philips curve
The Philip curve shows an inverse relationship between the rate of unemployment and the rate of change in money wages in the short run. Friedman argued that in the long run, there is no tradeoff between inflation and unemployment - the Philip curve becomes vertical at the natural rate of unemployment, which is the rate where expected and actual inflation are equal. Temporary reductions in unemployment below the natural rate are only possible if inflation rises above expectations, but eventually expectations will adjust and unemployment will return to the natural rate, even as inflation accelerates.
Theories of inflation
This document discusses different theories of inflation including:
1) Monetarist theory which links inflation to increases in the money supply.
2) Keynesian theory which attributes inflation to increases in aggregate demand beyond what aggregate supply can meet at full employment.
3) Structural theory which sees inflation as caused by inelasticities in an economy's production capacity, capital formation, institutions, agriculture sector, and labor markets.
Philip's Curve
The Phillips curve describes an inverse relationship between unemployment and inflation, such that lower unemployment is associated with higher inflation. While observed to be stable in the short-run, it does not hold in the long-run. The document discusses the origins of the Phillips curve from William Phillips' 1958 paper and subsequent modifications by economists like Friedman and Phelps who argued it does not reflect long-run economic realities. It also examines shifts to the Phillips curve from supply shocks and how the relationship between unemployment and inflation is now understood with incorporation of inflation expectations.
Inflation and its theories
The document discusses different theories of inflation including demand-pull inflation, cost-push inflation, and structural theories of inflation. Demand-pull inflation occurs when there is excess demand in the economy causing businesses to raise prices. Cost-push inflation results from increasing costs of production such as higher wages or material costs. Structural theories cite bottlenecks in areas like agriculture, government resources, and foreign exchange that create imbalances leading to price increases. The document also outlines causes, effects, and measures to control inflation including monetary, fiscal and other policies.
Consumption function
The document discusses the consumption function, which models the relationship between total consumption and national income. Consumption is defined as an increasing function of income. The average propensity to consume (APC) is the ratio of consumption to income and declines as income rises. The marginal propensity to consume (MPC) is the change in consumption from a change in income and is assumed to be positive but less than 1. Keynes' psychological law of consumption states that consumption increases less than proportionately to increases in income. Determinants of consumption include subjective psychological factors as well as objective factors like wages, fiscal policy, and interest rates. Theories like Duesenberry's relative income hypothesis model consumption as interdependent and influenced by social
Inflation
This document discusses inflation in the Indian economy. It defines inflation as a rise in the general price level and a fall in the purchasing power of money. There are two main types of inflation - demand-pull inflation, which occurs when demand exceeds supply, and cost-push inflation, which is caused by increased production costs. The consequences of inflation include uncertainty, reduced savings and investment, and income redistribution. To control inflation, the government uses fiscal measures like taxes, monetary measures like interest rates, and general measures like wage and price controls. Empirical data shows India's inflation rate was 5.96% in March 2013 according to the wholesale price index.
INFLATION ITS TYPES, CAUSES, CONSEQUENCES AND MEASURES.
Inflation is defined as a sustained increase in the price level or fall in the value of money. It occurs when the level of currency exceeds production. The value of money depreciates with inflation. There are different types of inflation including open, suppressed, galloping, creeping, and hyper inflation. Factors that can cause inflation include an increase in money supply, disposable income, deficit financing, and changes to agricultural and industrial growth. Ways to control inflation include monetary policies like credit control and demonetization, fiscal policies like reducing spending and increasing taxes and savings, and other measures to increase production and implement price controls.
Demand pull inflation
Demand-pull inflation occurs when an increase in aggregate demand causes the price level to rise. This initial increase in aggregate demand can be triggered by factors like interest rate cuts, money supply increases, tax cuts, or rising government spending. As prices rise, wages also increase which shifts the supply curve back left, maintaining full employment but at a higher overall price level. If the increases in aggregate demand are sustained over time, such as through continual money supply growth, it can lead to an ongoing inflationary spiral.
Absolute income hypothesis
This document outlines the Absolute Income Hypothesis theory presented by Keynes in 1936. The theory states that as absolute income increases, the proportion of that income spent on consumption decreases. So while consumption increases with more income, the rate of increase declines. Key points include consumption (C) increasing at a decreasing rate as income (Y) rises, the average propensity to consume (APC) decreasing as income rises, and the theory showing consumption-income relationships in both the short run and long run.
inflation- cost push and demand pull
This document discusses inflation, including its causes, types, effects, and methods for controlling it. It outlines two main types of inflation - cost-push inflation, which is caused by increases in production costs, and demand-pull inflation, which occurs when demand increases faster than supply. The document also examines the impacts of inflation and various monetary and fiscal policies that can be used to reduce inflation, such as increasing interest rates, reducing government spending, and implementing price controls.
Classical theory of employment
In Macroeconomics Income and Employment are interchangeable terms, since in the short-run National income depends on the total volume of employment or economic activity in the country. As income and employment are synonymous the employment theory is also called income theory.
It should be clear to readers that the classical economists did not formulate any specific theory of employment as such. They only laid down certain postulates which subsequently developed as a theory.
INFLATION : NATURE,EFFECT AND CONTROL
Inflation is defined as a sustained increase in the general price level of goods and services in an economy over time. It can be caused by factors on both the demand side, such as an increase in money supply, and the supply side, such as a rise in production costs. Inflation is measured by indexes that track changes in consumer prices (CPI) or wholesale prices (WPI) over time. There are different views on the causes and solutions for inflation, with Keynesians focusing on demand management and monetarists emphasizing the role of money supply.
Presentation on inflation
This document discusses inflation, its causes and effects. It defines inflation as a general rise in price levels over time which erodes purchasing power. Inflation is caused by excess money supply chasing limited goods. Key effects are a changing income distribution, reduced savings and capital formation, profits from price rises leading to black markets, and hardship for those on fixed incomes. While some argue low inflation spurs growth, critics say it ultimately hinders growth. The document examines India's anti-inflation measures and policies to better control inflation like monetary and fiscal policies, wage limits, spending cuts, and supply-side reforms.
Inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
Inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time.
Inflation - causes and measurement
This document discusses inflation, including its definition, types, causes, impacts, and measurement. It defines inflation as a persistent increase in general price levels over time. There are different types and speeds of inflation such as creeping, walking, running, and hyper inflation. Inflation is caused by demand-pull factors like too much money chasing too few goods, and cost-push factors like increases in wages, profits, import prices, and taxes. Impacts of inflation include a redistribution of income away from fixed income groups, impacts on production, savings, government finances, and exports/imports. Inflation is measured using price indices like the wholesale price index and consumer price index, which track the prices of baskets of goods
Structuralist theory of inflation
This document outlines the structural theory of inflation in less developed countries. It discusses how structural defects and bottlenecks exist in these economies that cause inflation, making the traditional quantity theory of money not applicable. Three main types of bottlenecks are described: agricultural bottlenecks due to issues like land ownership that limit food production growth; government resource constraints that force them to print money to fund infrastructure projects leading to inflation; and foreign exchange bottlenecks from low exports and high import payments causing currency devaluations and price increases. The structural theory argues these bottlenecks must be addressed through balanced investment instead of just monetary or demand-side policies to effectively reduce inflation in less developed economies.
General equilibrium ppt
1) General equilibrium analysis studies when all markets in an economy are simultaneously in equilibrium. It looks at the interdependence between economic agents.
2) The model assumes two goods, two consumers, two factors of production (labor and capital), perfect competition, and profit/utility maximization.
3) Equilibrium in production occurs when firms maximize profits by equalizing marginal rates of technical substitution between goods. Equilibrium in exchange occurs when consumers maximize utility by equalizing marginal rates of substitution between goods with their budget constraints.
4) Overall general equilibrium is reached when rates of substitution are equal between consumers and firms, meaning the economy is using its resources efficiently at the tangency point between the production possibility frontier and indifference
Inflation
This document discusses various concepts related to inflation including:
- Inflation is defined as a persistent rise in the general price level of goods and services. It is measured using price indexes like the CPI and WPI.
- There are different types of inflation based on rates like moderate, galloping, and hyperinflation. Additionally, inflation can be open or repressed based on government reaction.
- Inflation has causes like excess money supply, deficit financing, population growth, and high import prices. It can be demand-pull or cost-push.
Related concepts discussed include deflation, disinflation, reflation, stagflation, and recession.
General equilibrium theory
1. The document discusses general equilibrium theory (GET) and defines general equilibrium as a state where all markets and decision-making units are in simultaneous equilibrium.
2. It presents a simple two-sector general equilibrium model of an economy with two consumers, two goods, and two factors of production. Equations represent consumer demand, factor supply, factor demand, good supply, and market clearing for goods and factors.
3. With the number of equations equal to the number of unknowns, a general equilibrium solution exists in this Walrasian model under certain assumptions. GET provides a framework for understanding the complexity of economic systems through interdependent markets.
inflation
This document discusses money, inflation, and monetary policy. It defines money as assets used to purchase goods and services, and inflation as a general increase in prices. The quantity theory of money holds that inflation is primarily caused by increasing the money supply. When the money supply increases, the price level must also rise for monetary equilibrium to be maintained. Hyperinflation, with prices rising over 50% per month, can occur if a government prints too much money to fund spending. The costs of inflation include shoeleather costs, menu costs, and a redistribution of wealth through unexpected price changes.
Aggregate supply
The document discusses aggregate supply curves, including short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves. The SRAS curve slopes upward as producers are willing to supply more output when prices are higher in the short-run before input prices adjust. The LRAS curve is vertical at the natural level of output, as prices and costs have fully adjusted in the long-run. The document also discusses factors that can cause shifts in the SRAS and LRAS curves such as changes in input prices, taxes, and economic growth.
Inflation PPt
This document is a presentation on inflation that defines inflation as a rise in prices over time and discusses its measurement and causes. It examines quality and quantity theories of inflation and how inflation is measured using price indices like the consumer price index. The presentation also outlines different types of inflation and explores the effects of inflation on areas like production, income distribution, and foreign trade. It analyzes the negative effects of inflation and costs like money losing value. The presentation concludes by considering measures that can be used to control inflation such as monetary policy, wage and price controls, and cost of living allowances.
Inflation And Types of Inflation
This power point will give you the basic idea about inflation and how it occurs and remedies to control it........
Inflation
Inflation is defined as a sustained increase in the general price level in an economy over a period of time. It can be caused by demand-pull factors like excess money supply or cost-push factors like increases in production costs. There are three main types of inflation - creeping inflation (under 5%), running inflation (8-10%) and hyperinflation (double or triple digit price increases). Governments use monetary policy like increasing interest rates and fiscal policy like increasing taxes or reducing spending to control inflation. Both demand-pull and cost-push inflation impact the economy by hurting consumers and fixed income groups.
Inflation ppt
This document defines inflation as a rise in general price levels caused by an imbalance between the quantity of money and trade needs. It discusses the different types of inflation including creeping, walking, running, and galloping inflation. Causes of inflation include demand pull, cost push, expansion of the money supply, population growth, bank credit expansion, and black money. Effects are discussed as benefits to debtors, entrepreneurs, farmers, and upper income groups, but losses for creditors, fixed income groups, consumers, and middle/lower income groups. The document provides an example calculation of inflation rate and shows a chart of inflation rates for different income groups. Remedies discussed include increasing cash reserve ratios, price controls, import duty changes,
Inflation and Bangladesh Perspective
This document was made as an assignment for the course of Economics.
This document was made by the help of several books and online portals. Thanks to the author of that resources.
Inflation..
This document discusses various aspects of inflation including its causes, types, measurements, and facts. It defines inflation as a general increase in price levels and notes the main causes as demand-pull, cost-push, and structural factors. It outlines different types of inflation ranging from creeping inflation of under 3% annually to hyperinflation over 50% per month. The document also discusses how inflation is measured in India using the Consumer Price Index and Wholesale Price Index, and notes that India's current inflation rate is 5.05% annually.
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Inflation
This document discusses inflation in the Indian economy. It defines inflation as a rise in the general price level and a fall in the purchasing power of money. There are two main types of inflation - demand-pull inflation, which occurs when demand exceeds supply, and cost-push inflation, which is caused by increased production costs. The consequences of inflation include uncertainty, reduced savings and investment, and income redistribution. To control inflation, the government uses fiscal measures like taxes, monetary measures like interest rates, and general measures like wage and price controls. Empirical data shows India's inflation rate was 5.96% in March 2013 according to the wholesale price index.
INFLATION ITS TYPES, CAUSES, CONSEQUENCES AND MEASURES.
Inflation is defined as a sustained increase in the price level or fall in the value of money. It occurs when the level of currency exceeds production. The value of money depreciates with inflation. There are different types of inflation including open, suppressed, galloping, creeping, and hyper inflation. Factors that can cause inflation include an increase in money supply, disposable income, deficit financing, and changes to agricultural and industrial growth. Ways to control inflation include monetary policies like credit control and demonetization, fiscal policies like reducing spending and increasing taxes and savings, and other measures to increase production and implement price controls.
Demand pull inflation
Demand-pull inflation occurs when an increase in aggregate demand causes the price level to rise. This initial increase in aggregate demand can be triggered by factors like interest rate cuts, money supply increases, tax cuts, or rising government spending. As prices rise, wages also increase which shifts the supply curve back left, maintaining full employment but at a higher overall price level. If the increases in aggregate demand are sustained over time, such as through continual money supply growth, it can lead to an ongoing inflationary spiral.
Absolute income hypothesis
This document outlines the Absolute Income Hypothesis theory presented by Keynes in 1936. The theory states that as absolute income increases, the proportion of that income spent on consumption decreases. So while consumption increases with more income, the rate of increase declines. Key points include consumption (C) increasing at a decreasing rate as income (Y) rises, the average propensity to consume (APC) decreasing as income rises, and the theory showing consumption-income relationships in both the short run and long run.
inflation- cost push and demand pull
This document discusses inflation, including its causes, types, effects, and methods for controlling it. It outlines two main types of inflation - cost-push inflation, which is caused by increases in production costs, and demand-pull inflation, which occurs when demand increases faster than supply. The document also examines the impacts of inflation and various monetary and fiscal policies that can be used to reduce inflation, such as increasing interest rates, reducing government spending, and implementing price controls.
Classical theory of employment
In Macroeconomics Income and Employment are interchangeable terms, since in the short-run National income depends on the total volume of employment or economic activity in the country. As income and employment are synonymous the employment theory is also called income theory.
It should be clear to readers that the classical economists did not formulate any specific theory of employment as such. They only laid down certain postulates which subsequently developed as a theory.
INFLATION : NATURE,EFFECT AND CONTROL
Inflation is defined as a sustained increase in the general price level of goods and services in an economy over time. It can be caused by factors on both the demand side, such as an increase in money supply, and the supply side, such as a rise in production costs. Inflation is measured by indexes that track changes in consumer prices (CPI) or wholesale prices (WPI) over time. There are different views on the causes and solutions for inflation, with Keynesians focusing on demand management and monetarists emphasizing the role of money supply.
Presentation on inflation
This document discusses inflation, its causes and effects. It defines inflation as a general rise in price levels over time which erodes purchasing power. Inflation is caused by excess money supply chasing limited goods. Key effects are a changing income distribution, reduced savings and capital formation, profits from price rises leading to black markets, and hardship for those on fixed incomes. While some argue low inflation spurs growth, critics say it ultimately hinders growth. The document examines India's anti-inflation measures and policies to better control inflation like monetary and fiscal policies, wage limits, spending cuts, and supply-side reforms.
Inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
Inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time.
Inflation - causes and measurement
This document discusses inflation, including its definition, types, causes, impacts, and measurement. It defines inflation as a persistent increase in general price levels over time. There are different types and speeds of inflation such as creeping, walking, running, and hyper inflation. Inflation is caused by demand-pull factors like too much money chasing too few goods, and cost-push factors like increases in wages, profits, import prices, and taxes. Impacts of inflation include a redistribution of income away from fixed income groups, impacts on production, savings, government finances, and exports/imports. Inflation is measured using price indices like the wholesale price index and consumer price index, which track the prices of baskets of goods
Structuralist theory of inflation
This document outlines the structural theory of inflation in less developed countries. It discusses how structural defects and bottlenecks exist in these economies that cause inflation, making the traditional quantity theory of money not applicable. Three main types of bottlenecks are described: agricultural bottlenecks due to issues like land ownership that limit food production growth; government resource constraints that force them to print money to fund infrastructure projects leading to inflation; and foreign exchange bottlenecks from low exports and high import payments causing currency devaluations and price increases. The structural theory argues these bottlenecks must be addressed through balanced investment instead of just monetary or demand-side policies to effectively reduce inflation in less developed economies.
General equilibrium ppt
1) General equilibrium analysis studies when all markets in an economy are simultaneously in equilibrium. It looks at the interdependence between economic agents.
2) The model assumes two goods, two consumers, two factors of production (labor and capital), perfect competition, and profit/utility maximization.
3) Equilibrium in production occurs when firms maximize profits by equalizing marginal rates of technical substitution between goods. Equilibrium in exchange occurs when consumers maximize utility by equalizing marginal rates of substitution between goods with their budget constraints.
4) Overall general equilibrium is reached when rates of substitution are equal between consumers and firms, meaning the economy is using its resources efficiently at the tangency point between the production possibility frontier and indifference
Inflation
This document discusses various concepts related to inflation including:
- Inflation is defined as a persistent rise in the general price level of goods and services. It is measured using price indexes like the CPI and WPI.
- There are different types of inflation based on rates like moderate, galloping, and hyperinflation. Additionally, inflation can be open or repressed based on government reaction.
- Inflation has causes like excess money supply, deficit financing, population growth, and high import prices. It can be demand-pull or cost-push.
Related concepts discussed include deflation, disinflation, reflation, stagflation, and recession.
General equilibrium theory
1. The document discusses general equilibrium theory (GET) and defines general equilibrium as a state where all markets and decision-making units are in simultaneous equilibrium.
2. It presents a simple two-sector general equilibrium model of an economy with two consumers, two goods, and two factors of production. Equations represent consumer demand, factor supply, factor demand, good supply, and market clearing for goods and factors.
3. With the number of equations equal to the number of unknowns, a general equilibrium solution exists in this Walrasian model under certain assumptions. GET provides a framework for understanding the complexity of economic systems through interdependent markets.
inflation
This document discusses money, inflation, and monetary policy. It defines money as assets used to purchase goods and services, and inflation as a general increase in prices. The quantity theory of money holds that inflation is primarily caused by increasing the money supply. When the money supply increases, the price level must also rise for monetary equilibrium to be maintained. Hyperinflation, with prices rising over 50% per month, can occur if a government prints too much money to fund spending. The costs of inflation include shoeleather costs, menu costs, and a redistribution of wealth through unexpected price changes.
Aggregate supply
The document discusses aggregate supply curves, including short-run aggregate supply (SRAS) and long-run aggregate supply (LRAS) curves. The SRAS curve slopes upward as producers are willing to supply more output when prices are higher in the short-run before input prices adjust. The LRAS curve is vertical at the natural level of output, as prices and costs have fully adjusted in the long-run. The document also discusses factors that can cause shifts in the SRAS and LRAS curves such as changes in input prices, taxes, and economic growth.
Inflation PPt
This document is a presentation on inflation that defines inflation as a rise in prices over time and discusses its measurement and causes. It examines quality and quantity theories of inflation and how inflation is measured using price indices like the consumer price index. The presentation also outlines different types of inflation and explores the effects of inflation on areas like production, income distribution, and foreign trade. It analyzes the negative effects of inflation and costs like money losing value. The presentation concludes by considering measures that can be used to control inflation such as monetary policy, wage and price controls, and cost of living allowances.
Inflation And Types of Inflation
This power point will give you the basic idea about inflation and how it occurs and remedies to control it........
Inflation
Inflation is defined as a sustained increase in the general price level in an economy over a period of time. It can be caused by demand-pull factors like excess money supply or cost-push factors like increases in production costs. There are three main types of inflation - creeping inflation (under 5%), running inflation (8-10%) and hyperinflation (double or triple digit price increases). Governments use monetary policy like increasing interest rates and fiscal policy like increasing taxes or reducing spending to control inflation. Both demand-pull and cost-push inflation impact the economy by hurting consumers and fixed income groups.
Inflation ppt
This document defines inflation as a rise in general price levels caused by an imbalance between the quantity of money and trade needs. It discusses the different types of inflation including creeping, walking, running, and galloping inflation. Causes of inflation include demand pull, cost push, expansion of the money supply, population growth, bank credit expansion, and black money. Effects are discussed as benefits to debtors, entrepreneurs, farmers, and upper income groups, but losses for creditors, fixed income groups, consumers, and middle/lower income groups. The document provides an example calculation of inflation rate and shows a chart of inflation rates for different income groups. Remedies discussed include increasing cash reserve ratios, price controls, import duty changes,
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INFLATION ITS TYPES, CAUSES, CONSEQUENCES AND MEASURES.
INFLATION ITS TYPES, CAUSES, CONSEQUENCES AND MEASURES.
Similar to types of inflation and inflationary and deflationary gap
Inflation and Bangladesh Perspective
This document was made as an assignment for the course of Economics.
This document was made by the help of several books and online portals. Thanks to the author of that resources.
Inflation..
This document discusses various aspects of inflation including its causes, types, measurements, and facts. It defines inflation as a general increase in price levels and notes the main causes as demand-pull, cost-push, and structural factors. It outlines different types of inflation ranging from creeping inflation of under 3% annually to hyperinflation over 50% per month. The document also discusses how inflation is measured in India using the Consumer Price Index and Wholesale Price Index, and notes that India's current inflation rate is 5.05% annually.
Inflation, deflation,stagflation, reinflation,disinflation
This document defines and explains various economic concepts related to inflation and deflation:
1) Inflation is a continuous rise in the general price level over time which causes money to lose value, while deflation is a decrease in the general price level.
2) Causes of inflation include demand-pull inflation from increased aggregate demand and cost-push inflation from higher production costs.
3) Stagflation is a period of high inflation combined with high unemployment and low economic growth.
Inflation,deflation & stagfltion
Inflation is defined as a general rise in the price level of goods and services in an economy over time. It can be caused by demand-pull factors like increases in the money supply, or cost-push factors like increases in input prices. Low or moderate inflation is acceptable, while high inflation or hyperinflation causes economic distortions. Deflation is a general decline in price levels, often due to a reduction in the money supply or spending. While some types of deflation can be good, sustained deflation like that during the Great Depression is harmful to economies.
Inflation
This document provides an overview of macroeconomic concepts including inflation, deflation, and GDP deflator. It defines inflation as a sustained increase in prices and describes different types of inflation such as currency inflation, credit inflation, and demand-pull inflation. Deflation is defined as a decrease in general price levels. The GDP deflator measures the price level of all final goods and services in an economy. In conclusion, the document notes that inflation is a significant problem due to issues like black money and parallel money flows.
Inflation
This document defines different types of inflation including demand-pull inflation which occurs when demand exceeds supply, and cost-push inflation which is caused by rising input costs like wages, taxes, or import prices. It also discusses deflation as the opposite of inflation where prices decline. Stagflation is defined as slow economic growth combined with rising prices. Hyperinflation occurs when a large money supply increase is not supported by economic growth, causing sharp price rises. The main measures to control inflation discussed are monetary policy, fiscal policy, direct controls of prices and rationing, increasing output, controlling smuggling, maintaining industrial peace, and controlling the money supply through tight monetary policy without deficit financing.
Inflation
The document defines and explains several key concepts related to inflation:
- Inflation is a general rise in price levels across most markets over time, eroding purchasing power. It is measured by calculating changes in the consumer price index (CPI).
- The CPI tracks price changes of a basket of common goods and services in an area. A higher CPI indicates higher costs of living.
- While some inflation is necessary for economic growth, high or unpredictable inflation can be harmful as wages may not keep pace and erode purchasing power. Hyperinflation occurs when inflation accelerates rapidly out of control.
inflation.ppt.pptx
This document defines inflation and discusses how to measure it using price indexes like the Consumer Price Index. It describes types of inflation such as creeping, galloping, and hyperinflation. Causes of inflation include demand-pull factors like excessive spending, cost-push factors like rising input costs, and built-in inflation from price/wage spirals. Effects are the redistribution of wealth from savers to borrowers, social impacts, and economic inefficiencies from distorted prices. Methods to stop inflation involve controlling wages and prices, stimulating competition, and monetary/fiscal policy measures.
economics
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Inflation is a rise in the general level of prices for goods and services over time, resulting in a loss of purchasing power of a currency. There are two main types of inflation: demand-pull inflation, which occurs when demand exceeds supply, and cost-push inflation, which happens when input costs rise, such as from increasing wages, taxes, or imported inflation. Deflation is the opposite of inflation and refers to a decline in general price levels, while stagflation describes slow economic growth accompanied by rising prices.
Inflation | Types and causes of inflation
In this Presentation "Inflation in Economics" offers a comprehensive overview of inflation. It begins with an introduction to the concept, defining inflation and explaining its basics. The presentation then delves into different types of inflation, such as demand-pull and cost-push inflation, providing real-life examples for better understanding. It also explores the various causes of inflation, including built-in inflation (wage-price spiral), monetary inflation, supply shock, and imported inflation. Finally, it covers the effects of inflation on different aspects of the economy and society, such as decreased purchasing power, uncertainty and planning challenges, interest rate adjustments, international competitiveness, and the impact on savers and borrowers. The presentation is designed to provide a clear and thorough understanding of the complex topic of inflation.
Recession and deflation
This document discusses deflation, recession, and the relationship between the two economic concepts. It notes that deflation is a decrease in the general price level, while a recession is a period of economic contraction defined by falling GDP, income, profits and rising unemployment. A deflationary cycle can lead to recession as consumers and businesses reduce spending and hiring in response to lower prices. Recession in turn exacerbates deflation as spending declines. The document explores debates around whether deflation is good or bad for an economy, as well as methods for preventing recession, including fiscal and monetary policy interventions.
INFLATION OF BUSINESS CYCLE
in first part of this power point presentation, you'll know about business cycle and some basic terminology of business cycle graph.
In second part, you'll understand the basic concept of inflation, i.e.. definations, types, causes, measures, etc...
Hope, it'll be benificial to you
THANKYOU :)
5. concept of inflation & stagflation
This document discusses the concepts of inflation and stagflation. It defines inflation as a general rise in prices or a fall in the value of money. There are various types of inflation classified based on rate, government intervention, coverage, time period, and causes such as credit, scarcity, deficit, currency, profit, tax, wage, foreign trade, and stagflation. Stagflation refers to high inflation combined with high unemployment, which India experienced from 1991-1994 due to various economic factors. The document also outlines the causes, effects, and measures to control inflation through monetary, fiscal, and other policies. Deflation is defined as a sustained fall in the general price level that occurs when inflation becomes negative
inflation
1. Inflation is defined as a rise in the general level of prices where a unit of currency buys less than it previously could. It occurs when the money supply grows faster than the economy.
2. There are three main types of inflation: demand-pull inflation caused by increased demand, cost-push inflation caused by increased costs of production, and built-in inflation caused by expectations of future inflation.
3. While inflation has some potential advantages like enabling adjustment of wages and prices, it also has disadvantages like uncertainty that reduces investment, and loss of international competitiveness from higher prices. High or hyperinflation can severely damage an economy.
Inflation
Inflation refers to a general increase in the prices of goods and services in an economy over time, which reduces the purchasing power of currency. While some inflation is necessary for economic growth, high or unpredictable inflation can be harmful. Negative effects of inflation include cost-push inflation which fuels a wage-price spiral, hoarding of goods, social unrest, and in extreme cases hyperinflation where a currency is abandoned. However, moderate and stable inflation provides benefits like allowing labor markets to adjust more quickly and giving central banks tools to stimulate the economy through interest rate changes.
Inflation.pptx
This PPT Aims to Provide knowledge and Understanding about the Concept of Inflation, Causes of Inflation, How to reduce inflation, Types of Inflation and So on.
Inflation and control measures
This document discusses inflation, including its definition, types, causes, effects, and measures to control it. Inflation is defined as a sustained increase in the general price level in an economy over time. The main causes of inflation include an increase in the money supply, rise in aggregate demand, and contraction of aggregate supply. Effects of uncontrolled inflation include inefficiencies in markets, uncertainty, and imbalance of trade. Measures to control inflation involve monetary policies like credit control, fiscal policies like increasing taxes, and other steps like price controls and increasing production.
Inflation for Layman
This document discusses different types of inflation including demand-pull, cost-push, administered price, and sectoral inflation. It provides explanations of cost-push inflation theory, sectoral inflation theory, and structural inflation theory. Cost-push inflation is caused by increases in production costs like wages, profits, or materials that result in lower aggregate supply and higher prices. Sectoral inflation refers to price increases in different industry sectors, while structural inflation arises from unstable export growth inadequate to support the required economic growth rate.
Inflation
Presented by "HARSHIT MISHRA" M.Sc. (Ag) Agril. Economics
Acharya Narendra Deva University Of Agriculture And Technology, Kumarganj, Ayodhya
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types of inflation and inflationary and deflationary gap
- 1. TOPIC INFLATION AND ITS TYPE PRESENTED TO SIR SADAM PRESENTED BY AYAZ MASHORI
- 2. Content Inflation………………... Deflation………………….. Disinflation………………..... Types of inflation……………. Causes of inflation ………….. Inflationary gap………………. Deflationary gap………………..
- 3. Inflation Inflation occurs when the level of prices of goods increase people give more money but take less of the money inflation is a sustained increase in the price level of goods and services in an economy over a period of time
- 4. Deflation In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%. Inflation reduces the value of currency over time, but deflation increases it. This allows one to buy more goods and services than before with the same amount of currency
- 5. Disinflation Disinflation is a decrease in the rate of inflation – a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time. It is the opposite of reflation
- 6. Types of inflation Hyperinflation Glopping inflation Creeping inflation
- 7. Hyperinflation it is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Hyperinflation is over 100% per year. Prices as well as wages are extremely erratic. Money have no value and barter trade emerges (barter means the exchange of good for good). Example: Germany after I.WW, Hungary after II.WW
- 8. Glopping inflation the rate of inflation exceeds the rate of production growth, Galloping inflation is from 10% to 100%. Money loose purchase power, people hold as little money as possible.
- 9. Creeping inflation the rate of inflation doesn’t exceed the rate of production growth, Creeping inflation is < 10%
- 10. Causes of inflation Demand-pull inflation Arises when aggregate demand in an economy outpaces aggregate supply It involves inflation rising as real gross domestic product rises and unemployment falls. This is commonly described as "too much money chasing too few goods". Possible causes of demand-pull inflation: Excessive investment expenditures Excessive growth of consumption expenditures Low-cost loans Tax cutting Augmentation of government expenditures
- 11. CAUSES OF INFLATION COST PUSH INFLATION Cost-push inflation is a type of inflation caused by substantial increases in the cost of important goods or services where no suitable alternative is available. It stands in contrast to demand-pull inflation
- 12. EXAMPLE OF COST PUSS INFLATION For example, an increase in the price of oil increases the cost of production for almost all goods and services and results in immediate increase in inflation. Such an inflation is cost-push inflation. Similarly labor strikes, wars, floods, etc. reduce supply and increase prices
- 13. INFALTIONARY GAP An inflationary gap is a macroeconomics concept that describes the difference between the current level of real gross domestic product (GDP) and the anticipated GDP that would be experienced if an economy is at full employment, also referred to as the potential GDP. For the gap to be considered inflationary, the current real GDP must be the higher of the two metrics. ‘’REFFERENCE’’ https://www.investopedia.com/terms/i/inflationary_gap.asp #ixzz5WiDVGSoF
- 14. Graph
- 15. DEFLATIONARY GAP Deflationary gap is the amount by which actual aggregate demand falls short of aggregate supply at level of full employment‘ It is a measure of amount of deficiency of aggregate demand.
- 16. GRAPH
- 17. THANKX FOR YOUR ATTENTION