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WHAT IS INFLATION?
Inflation means a considerable and persistent rise in the general price level over a period of time. Inflation up to certain level is advantageous and desirable as it is conductive to economic growth and employment. But beyond this level, inflation is harmful and often proven disastrous to the economy. Hence moderate rate of inflation is considered to be desirable and acceptable.
TYPES OF INFLATION: RATE BASIS Moderate inflation: general level of price rise at a moderate rate over a long period of time. Galloping inflation : proceeds at exceptionally high rate. Rate in double or tripple digit. Hyper inflation. : is often defined as inflation that exeeds 50% per month.
NATURE OF PRICE CHANGE INFLATION(10%) DISINFLATION(5.5%) DISINFLATION (5.0%) ZERO RATE OF INFLATION DEFLATION
INFLATION IN INDIA
Indian economy is prone to inflation. However, in view of the fact that it is fast growing economy, inflation rate has been within the range of moderate inflation.
CONCLUSION
1.
INFLATION IS GENERALLY ASSOCIATED WITH AND IS OFTEN CAUSED BY , THE HIGH GROWTH RATE ITSELF.
2.
THEREFORE INFLATION IS CONSIDERED TO BE A SERIOUS MACROECONOMIC PROBLEM NECESSITATING FORMULATION OF SUITABLE POLICY MEASURES AND EFECTIVE IMPLEMENTATION OF POLICY FOR CONTROLLING PRICE RISE AND MAINTAINING INFLATION AT A REASONABLE RATE.
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