INFLATION

&

Effect

WHAT IS INFLATION?
State in which the value of money is falling i.e the prices are

rising.
Purchasing power of consumer decreases due to rise in price. Inflation is a rise in the general level of prices of goods and services over time.

CREEEPING

WALKING

HYPER

IF Income increases Then Demand Also Increases

Demand FOR Bread = 4 Supply FOR Bread = 3 Demand > supply = price Rise

CAUSES OF INFLATION
Increase in money supply :credit expansion ,salary
Increase in export

Increase in population
Indirect taxes : sales tax, custom duty and excise duty Deficit Financing

EFFECT OF INFLATION

Reduces saving Unequal distribution of wealth Reduces volume of production Quality fails

Fixed income group

Cost Push

POOR RICH

Thank YOU!