Inflation is a phenomenon of the prices of everything goes up over time.
Types of Inflation
- Demand Pull Inflation : Due to aggregate demand in an economy, for a good or service rises up with respective of the supply of that good or service (due to money supply or public expenditure).
- Cost Push Inflation : When the cost rises to produce the products.
- Repressed Inflation : Due to excess demand on certain commodity.
- Hyper Inflation : the Price level increases very fastly over a certain period of time.
- Creeping Inflation : The price level increases very slowly over a certain period of time.
- Moderate Inflation : The price level is neither too fast nor too slow. It is neither Hyper Inflation nor Creeping Inflation.
- Stagflation : Due to increase of unemployment/recession.
# Key Points
- Inflation is the state in which the value of money decreases.
- Deflation is the reverse process of inflation.
- Reflation is for the economic stimulation by increasing the money supply.
- The Business class will be richer due to higher price of commodities.
- Due to inflation, debtors gain and creditors lose.
- Black Money is the income on which tax is evaded.
- India changed from the rupee, anna, pie system to decimal currency on April 1st, 1957.
- An economic recession is a decline in Gross Domestic Product (GDP) for two or more consecutive quarters.
- Cheap money is a loan or credit with a low interest rate.
- Ten rupee has the signature of the RBI governor.
- US dollar is used for international payments in India.
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