Inflation

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Inflation

  1. 1. INFLATION
  2. 2. BBS (M-1)2nd
  3. 3. Group Members Mehnaz Akhtar 17 Umair Khalil 42 Mehreen Sohail 44 Sidra Habib 167 Shazia Ramzan 31 Ayesha Shaheen 06 Waseem Gill 26
  4. 4. Introduction Definition Methods to measure Inflation Types of Inflation Causes of Inflation Effects of Inflation Measure to control Inflation Inflation rate Conclusion
  5. 5. “ Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair ”
  6. 6. Inflation means a persistent increase in the level of consumers prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
  7. 7. In Economics, Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
  8. 8.  Consumer Price Index (CPI)  Wholesale Price Index (WPI)
  9. 9. Current CPI/WPI – Last Calculated CPI/WPI Last Calculated CPI/WPI Inflation Rate = 150 - 140 140 Inflation Rate = 100 100 =7.12%
  10. 10. Umair Khalil Roll No. 42
  11. 11.  War Time Inflation Peace Time Inflation
  12. 12. 1. Creeping Inflation. 2. Walking Inflation. 3. Running Inflation. 4. Galloping or Hyper Inflation.
  13. 13.  Open Inflation : Government takes no steps to control price rice  Repressed Inflation : Price level check by Government
  14. 14. Mehreen Sohail Roll No. 44
  15. 15.  Comprehensive : All commodities available in the economy witness price rise  Sporadic Inflation : Only a few commodities register a rise in price
  16. 16.  Partial : Before the stage of full employment  Full : After the stage of full employment is reached
  17. 17.  Demand Pull : Increase in the aggregate demand for goods and services  Cost Push : a. an increase in wages b. an increase in the profit margin
  18. 18. Sidra Habib Roll No. 167
  19. 19. Inflation is a persistent and appreciable rise in general level or average of price -Acc to ACKLEY
  20. 20. 1. DEMAND side factors: Aggregate demand is greater than aggregate supply 2. SUPPLY side factors: Aggregate supply fall short of aggregate demand
  21. 21. 1. Rise in Public expenditure - expenditure incurred by govt. - Aggregate demand is greater than aggregate supply
  22. 22. 2. Deficit financing - Expenditure is more than Income
  23. 23.  Irving fisher’s quantity of money explains- “Increase in money supply with proportionate increase in output lead to rise in PRICE and fall in money VALUE”
  24. 24.  It is unearned income by public servants Excess demand lead to inflation
  25. 25.  Growth in population  Growth in private expenditure  Increase in Export  Money reduction in direct taxes
  26. 26.  Industrial disputes  Natural calamities  Artificial scarcity  Increase in export
  27. 27.  Global factors [impact high oil price]  Fluctuating agricultural growth  Neglecting the production of consumer goods
  28. 28. Shazia Ramzan Roll No. 31
  29. 29. Effects of inflation  Inflationary noise  Effect on economic growth  Effect on consumption and economic welfare
  30. 30. Economic Effect of inflation • Distribution of income. • Distribution of wealth • Different sector of society.
  31. 31.  Wage earner  Producer  Fixed income people  Borrower & lender  Government  Employment
  32. 32. Ayesha Shaheen Roll No. 06
  33. 33.  MONTARY MEASURES  FISCAL MEASURES  OTHER MEASURES
  34. 34. A) CREDIT CONTROL B) DEMONETIZATION C) ISSUE OF NEW CURRENCY
  35. 35. A) REDUCTION IN UNNECESSARY EXPENDITURE B) INCREASE IN TAXES C) INCREASE IN SAVING D) SURPLUS BUDGETS E) PUBLIC DEBT
  36. 36. A) PRICE AND WAGE CONTROL B) INDEXATION C) TO INCREASE INPRODUCTION D) RATIONING
  37. 37. Waseem Gill Roll No. 26
  38. 38. Inflation rate 89.7 %
  39. 39. German paper mark OCT 1923 Inflation rate 20.87%

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