GAUTAMKUMAR_TEST_ASSIGNMENT

TOPIC:- INFLATION

IN WHICH WE WILL DISCUS :

What is inflation
When inflation is occure
Impact of inflation
When inflation is benificial for economy
How to controle inflation

what is inflation

Decline value of money

inflation is defined a sustaioned increase in the general level of prices for goods and services.

There are several variations on inflation:-

Deflation :- Deflation is when the general level of prices is falling. This is opposite of inflation.
Hyperinflation:- Hyperinflation is unusual rapid inflation
Stagflation is a term coined to mean high unemployment (stagnation) and high inflation.

Rate of Inflation

The inflation rate is the percentage change in the overall level of prices from one year to the next.

Rate of inflation in year (t)

=Pt - Pt - 1 / Pt -1*100

When inflation is occur

Inflation occurs due to an imbalance between demand and supply of money change in production and distribution cost. Increase in taxes

Impact of inflation:-it has worst impact on consumers high prices of day to day goods make it difficult for consumers to afford even the basics commodities in life.

when inflation is benificial for economy:An inflation rate of 2% or 3% is beneficial for an economy as it encourages people to buy more and brrow more because during times of lower inflation ,the level of inflation rate also remains low ,hence the government as well as the central bank alwase strive to achieve a limited level of inflation