Inflation is a phenomenon of the prices of everything goes up over time.
inflation economy
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.