The document discusses inflation, defining it as a rise in the general price level. It notes that inflation is caused by increases in the money supply in the long run but is dependent on supply and demand factors in the short and medium term. It describes demand-pull and cost-push inflation and various monetary and fiscal measures used to control inflation, including credit control and reducing unnecessary government spending. The negative impacts of inflation and examples of hyperinflation in countries like Austria and Georgia in the early 20th century are also summarized.

2.  The term "inflation" originally referred to
increases in the amount of money in
circulation, and some economists still use the
word in this way.
 Most economists today use the term
"inflation" to refer to a rise in the price level.
 Economists generally agree that in the long
run, inflation is caused by increases in the
money supply.
 However, in the short and medium term,
inflation is largely dependent on supply and
demand pressures in the economy.

3.  Demand pull inflation:- Demand-pull inflation
happens when people's incomes rise, but the
amount of goods and services in the marketplace
remain the same. Since people have more money to
spend, they are willing to pay more for goods and
services. In other words, the total demand will go up,
which will cause prices to rise. Demand-pull inflation
has been described as "more money chasing the
same amount of goods."
 Cost push inflation:- Cost-push inflation happens
when the cost of producing the item goes up. This
means that the total supply for an item goes down,
and again prices rise.

4.  Monetary Measures
 Fiscal Measures

5.  Credit Control:- Controlled by RBI.
 Issue of New Currency

6.  Reduction in Unnecessary Expenditure
 Increase in Taxes
 Surplus Budgets
 Public Debt

7.  They add inefficiencies in the market, and make it
difficult for companies to budget or plan long-term.
 Uncertainty 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 rates.
 Inflation rate in the economy is higher than rates in
other countries; this will increase imports and reduce
exports, leading to a deficit in the balance of trade.

8.  A condition of slow economic growth
and relatively high unemployment - a
time of stagnation - accompanied by a
rise in prices, or inflation.

9.  Hyperinflation is a situation where
the price increases are so out of control
that the concept of inflation is
meaningless.

10.  Austria
 In 1922, inflation in Austria reached
1426%, and from 1914 to January 1923,
the consumer price index rose by a
factor of 11836, with the highest
banknote in denominations of
500,000 krones.

11. • Free City of Danzig
Danzig went through its worst inflation in 1923.
In 1922, the highest denomination was
1,000 Mark. By 1923, the highest
denomination was 10,000,000,000 Mark.
 Georgia
Georgia went through its worst inflation in
1994. In 1993, the highest denomination was
100,000 coupons [kuponi]. By 1994, the
highest denomination was 1,000,000
coupons. In the 1995 currency reform, a new
currency, the lari, was introduced with 1 lari
exchanged for 1,000,000 coupons.

12. Done by
Vignesh Nathan