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INFLATION
GROUP MEMBERS:
FUZAIL ASHRAF AND MUHAMMAD HAMMAD KHAN
CLASS: B.B.A
SUBJECT: ENGLISH
 In this Presentation we will discuss topics which are 2
given below :

 Inflation
 Types of Inflation
 How can we control inflation?
 INFLATION 3
Inflation means an increase in the price of goods and services
rise & decrease in the value of money.

Example: you bought a pencil in 2020 for

05 rupees now if you buy the same pencil
in 2021 it will cost 10 rupees so that
means the product price has increased
there is not enough power in 05 rupees
right now to buy it. So the decrease of
value of money and rising product prices
are called inflation.
 TYPES OF INFLATION: 4

Types of inflation vary from country to a country situation

but we will discuss them here according to Pakistan’s situation.
so we have to discuss seven types of inflation which are
given below:
1) Cost Push Inflation 2) Demand Pull Inflation
3) Wage Push Inflation 4) Monetary Inflation
5) Hyper Inflation 6) Stag Inflation
7) Import Inflation
 1) Cost Push Inflation 4

 Isa type of inflation caused by substantial

increases in the cost of imported goods or
services where no suitable alternative is
available. It stands in contrast to demand-
pull inflation.
 Similarlylabor strikes, wars, floods, etc.
Reduce supply and increase prices.
 2) Demand Pull Inflation 5
 When aggregate demand for goods and
services in an economy rises more rapidly than
an economy's productive capacity.
 This is commonly described as "too much money
chasing too few goods.”
Example:
Sometimes demand-pull inflation can
result from increases in government spending. If
the government puts money into a system where
resources are limited, demand-pull inflation could
follow.
3) Monetary Inflation 7

 Monetary inflation is a sustained

increase in the money supply of a
country (or currency area).
Example
Recently in America there inflation
rate increased from 1% to 6.2% due to
produced lot of dollars than their back
assets..
 4) Wage Push Inflation 6
 A rise in prices is caused by a rise in the
amount that workers earn, which increases
the cost of producing goods it’s called Wage
Push Inflation.
Example
If any company raises the minimum
Rs1,000 to Rs10,000 on workers, that
company must compensate by increasing the
prices of its products in the market.
 5) Hyper Inflation 8
 In economics, hyperinflation is very high and
typically accelerates inflation. It quickly erodes
the real value of the local currency, as the prices of
all goods increase.
 Typically, an economy has to see an inflation rate
of greater than 50% for at least a month before
economists use the hyperinflation label.
Example
Hungary 1946. Highest monthly inflation:
Prices doubled every 15.6 hours it was the worst case
of hyperinflation ever recorded occurred in Hungary
in the first half of 1946.
6) Stag Inflation 9

 Stagflation or recession-inflation is a situation in which the

inflation rate is high, the economic growth rate slows, and
unemployment remains steadily high.
Example
An example of stagflation is when a government prints
currency (which would increase the money supply and create
inflation), while raising taxes (which would slow economic
growth)—resulting in stagflation.
 7) Import Inflation 10
 Imported inflation is a general and sustainable price increase
due to an increase in the costs of imported products.
 This price increase concerns the price of raw materials and all
imported products or services used by companies in a country.
 A rise in prices leads to a rise in the import bill of the country.
 Imported inflation is also referred to as cost inflation.
Example
If the dollar rate and taxes will increase in Pakistan so then
Pakistani people have to pay more money than before it will
cause the import inflation in Pakistan
CPI Formula 11

 CPI stands for Consumer Price Index

 The Consumer Price Index (CPI) is a measure of the
aggregate price level in an economy. ... The CPI measures
the changes in the purchasing power of a country's
currency.
Example
A USD/PAK rate of Rs 176 means 1 US dollar is
equivalent to 176 Pakistani Rupees.
CPI Formula Equation 12

𝐶𝑃𝐼 𝑐 − 𝐶𝑃𝐼 𝑜   x  100

𝐶𝑃𝐼 𝑐 =
𝐶𝑃𝐼 𝑜

 Current Price Index

 = Previous Price Index
How Cost Push & Demand Pull Inflation 13
have impact on Auto Sector of Pakistan?
 Impact By Cost Push Inflation
 Impact By Demand Pull Inflation
 Calculation of some cars by CPI Formula

Corolla Altis X Automatic 1.6 =

= 6.15 %
Civic 1.8L CVT =
= 10.1 %
How can we minimize the impact of Cost Push & 14
Demand Pull Inflation in Auto Sector of Pakistan?

We Can Minimize The Impact Of Cost Push Inflation By Some Solutions:

 By decrease taxes on imported items.
 By open industries which can make parts of cars.
 By decrease the prices of raw materials.

We Can Minimize The Impact Of Demand Pull Inflation By Some Solutions:

 By increase installment and reduce the time period.
 By increase interest rate.
 15

Thank you