INFLATION SOLUTION: MORE HARM THAN

GOOD

A sustained increase in the general level of prices of goods and services

Every Rupee OR Dollar you own buys a smaller percentage of a good or service

TYPES OF INFLATION

Open Inflation +

Suppressed Inflation -

CAUSES OF INFLATION

Demand-pull inflation  theory

Cost-push inflation theory

Supply of Money

EFFECTS OF INFLATION

Hoarding

Distortion of relative prices

Increased risk - Higher uncertainties

Existing creditors will be hurt

Fixed income recipients will be hurt

Increased consumption ratio at the early stages of inflation

Lowers national saving

Illusions of making profits

Currency debasement

Causes an increase in tax bracket

MEASURES TAKEN BY GOVERNMENT TO CURB INFLATION

Monetary Measures

Control over money

Credit control

Fiscal Measures

Decrease in public expenditure

Delay in payment of old debts

Increase in taxes

Liberalisation of imports

Ban on exports

A cut in Excise duties and Customs duties

SOLUTION MORE HARM THAN GOOD

OUR PERSPECTIVE

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