This document defines inflation as a rise in general price levels caused by an imbalance between the quantity of money and trade needs. It discusses the different types of inflation including creeping, walking, running, and galloping inflation. Causes of inflation include demand pull, cost push, expansion of the money supply, population growth, bank credit expansion, and black money. Effects are discussed as benefits to debtors, entrepreneurs, farmers, and upper income groups, but losses for creditors, fixed income groups, consumers, and middle/lower income groups. The document provides an example calculation of inflation rate and shows a chart of inflation rates for different income groups. Remedies discussed include increasing cash reserve ratios, price controls, import duty changes,

2. SMI - PGPM

3. “something which decides economy of the country”
(UPDATION THROUGH PRESENTATION)
INFLATION

4. TABLE OF CONTENT
MEANING
DEFINITION
TYPES OF INFLATION
CAUSES
EFFECTS
HOW TO CALCULATE INFLATION RATE
EXAMPLE
CHART
INFLATION IN NEWS PAPER
REMEDIES

5. Rise in Price
It is a rise in the general price
level caused by an
imbalance between the quantity
of money and trade
needs.

6. The word "inflation" originally applied solely to the
quantity of money.
It meant that the volume of money was
inflated, blown up, overextended.

7. According to Pigou “ Inflation arises when
money income is expanding more than
proportionate to income earning activity”.

8. Types of inflation (Rise in price)
,
1) Creeping inflation 2) Walking inflation
3) Running inflation 4) Galloping inflation

9. Creeping inflation:-
The inflation of a nation increases gradually, but continually,
over time.
Wa l k i n g i n f l a t i o n : -
When the price rise is moderate. It is a warning signal for the
government to control it before it turns into running inflation.

10. Running inflation:-
A rapid acceleration in the rate of rising prices more
than 10% per annum is referred as Running Inflation
Galloping inflation:-
Prices rise by double or triple digit inflation rates like 400% or
999% per annum.

11. 1)Demand pull inflation(ex: petrol)
2)Cost push inflation(ex: cement)
3)Over- Expansion of Money Supply
4)Increase in Population
5)Expansion of Bank Credit
6)Black Money
7)Poor Performance of Farm Sector

12. EFFECTS OF INFLATION
BENEFITS LOSES
• DEBTORS • CREDITORS
• ENTREPRENEURS • FIXED INCOME GROUPS
• FARMERS • CONSUMERS
• UPPER INCOME GROUPS • MIDDLE AND LOWER
INCOME GROUPS

13. Calculation of inflation:
New price – Old price
=
Old price
* 100
For instance:-
Inflation for today’s petrol price.
Old price = 70
New price = 75
75-70
=
70 * 100 = 7.14%

14. ITEM RICE PETROL
INFLATION 5% 7% 5% 7%
RATE
POOR 5K 3K 5L 3L
MIDDLE 5K 4K 5L 4L
RICH 5K 5K 5L 5L

17. 9.o%
Flag country Inflation Rate
Consumer price(%)
Nepal 8.6
Turkey 8.7
Greenland 9.4
Uganda 9.4
Burma 9.6
Ukraine 9.8
India 9.7

18. Inflation will come down to 6-7 percent by March: Pranab
In the next 6 to 12 months as the government has taken a
number of fiscal and monetary measures to address the
issue of demand-supply mismatch, the main reason behind
general price rise.

19. Sonia asks govt to provide relief to common
man

20. Inflation likely to fall to 7% by March 2012:
Rangarajan
Dr C. Rangarajan, Chairman,
(Prime Minister’s Economic Advisory Council.)

22. REMEDIES
1. Cash Reserve Ratio increased.
2. Control over Price of Petrol and Diesel.
3. Decreased import tariff.
4. Tax increase
5. Cement price control.
6. Import duty on non-agricultural products was brought down to
10% from 12.5%
7. Allowed appreciating the Rupee .

23. www.inflation.us
www.inflationdata.com
www.rateofinflation.com
www.wikipedia.org
www.investopedia.com
www.tradingeconomics.com
www.hindu.com
www.businessline.com
www.deccanhearld.com
www.economywatch.com
www.bankrate.com

25. PART- 2
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