View Single Post
Old Tuesday, July 23, 2013
jaris ojeran jaris ojeran is offline
Senior Member
Join Date: Jun 2013
Posts: 90
Thanks: 31
Thanked 44 Times in 33 Posts
jaris ojeran is on a distinguished road

What is inflation?

situation in which there is sustained , excessive, and general increase in price levels. that means"too much money chasing after too few goods"


Wage/Demand Pull: supply of products goes down . this causes demand of products to go up. this cause DP inflatio
Cost Push: cost of production goes up. this causes final prices of goods to go up too. this cause CP inflation
Oligopolistic/administered: when companies decide to increase price to get more profit margin
sectorial: it is like. if price of oil increases the aviation and transport sector will also be affected. this inflation is cause dby increase of prices for any particular sector.
Fiscal: when there is excessive govt: spending


1- govt spending excess of money
2- rise in production cost (when labor become expensive)
3- federal taxes put on consumer products
4- international lending and national debts
5- faster economics growth in other countries
6- depreciation of exchange rate


effects on time value of money (interst rates affected)
impact on treasury of nation
decrease in purchasing power of rupee
change allocation of income (between lenders and borrowers)
making of speculation by some and getting advantage.

just typed my notes. there is lot available about inflation on net.
next time i shall tel you difference between monetary and fiscal policy
Reply With Quote