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  • The Inflation Rate:: Demand Pull Inflation May Be Due To

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    The document discusses inflation, defining it as a decrease in purchasing power and measuring it as the percentage change in a price index from one year to the next. There are two types of inflation: demand-pull, which can be caused by increases in money supply, government purchases, or exports, and cost-push, which can result from increases in wage rates or raw material prices. The effects of inflation include impacts on production, income distribution, consumption, foreign trade, and social and political factors.

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    inflation rate its kind and measurement

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    The Inflation Rate

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    The document discusses inflation, defining it as a decrease in purchasing power and measuring it as the percentage change in a price index from one year to the next. There are two types of inflation: demand-pull, which can be caused by increases in money supply, government purchases, or exports, and cost-push, which can result from increases in wage rates or raw material prices. The effects of inflation include impacts on production, income distribution, consumption, foreign trade, and social and political factors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    3 views2 pages

    The Inflation Rate:: Demand Pull Inflation May Be Due To

    Uploaded by

    Aurnob ORnob
    The document discusses inflation, defining it as a decrease in purchasing power and measuring it as the percentage change in a price index from one year to the next. There are two types of inflation: demand-pull, which can be caused by increases in money supply, government purchases, or exports, and cost-push, which can result from increases in wage rates or raw material prices. The effects of inflation include impacts on production, income distribution, consumption, foreign trade, and social and political factors.

    Copyright:

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    The Inflation Rate :

    In a single word decrease of purchasing power is inflation. Inflation rate is a measure of how fast the overall price level is rising. There are two kinds of inflation: a) Demand pull b) Cost push

    Demand pull inflation may be due to: a) Increase in money supply b) Increase in government purchases c) Increase in exports Cost push inflation may arise because of: a) Increase in money wage rates b) Increase in money prices of raw materials.

    Measuring Inflation If the price level in the current year is P1 & in the previous year is Po, then inflation for the current year is:

    Types of Inflation Inflation is measured by calculating the percentage rate of change of a price index, which is called the inflation rate Inflation is a very unpopular happening in an economy. Inflation is the most important concern of the people as it badly affects their standard of living.

    The effects/consequences of inflation are as follows

    (a) Effects of inflation on production (b) Effects of inflation on income distribution (c) Effects on consumption and welfare (d) Effects on foreign trade (e) Effects on consumption and welfare (f) Effects on foreign trade (e) Social and political effects.

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