Appropriate values like

consideration and understanding

during the time of inflation
 ▪ Inflation is a sustained rise in overall price levels.
Moderate inflation is associated with economic
growth, while high inflation can signal an
overheated economy. If economic growth
accelerates very rapidly, demand grows even faster
and producers raise prices continually is a rise in
prices, which can be translated as the decline of
INFLATION purchasing power over time. The rate at which
purchasing power drops can be reflected in the
average price increase of a basket of selected goods
and services over some period of time.
▪ The most commonly used inflation indexes are the Consumer
Price Index and the Wholesale Price Index. Inflation can be
viewed positively or negatively depending on the individual
viewpoint and rate of change.
Those with tangible assets, like property or stocked
commodities, may like to see some inflation as that raises the
value of their assets.
The most commonly used inflation indexes are the Consumer
Price Index and the Wholesale Price Index. Inflation can be
viewed positively or negatively depending on the individual
viewpoint and rate of change.

▪ Those with tangible assets, like property or stocked

commodities, may like to see some inflation as that raises the
value of their assets.
 ▪ Demand-pull inflation, cost-push inflation, and built-in inflation.
▪ Demand-pull inflation occurs when an increase in the supply of
money and credit stimulates the overall demand for goods and
services to increase more rapidly than the economy’s production
capacity. This increases demand and leads to price rises.

Inflation is ▪ Cost-push inflation (also known as wage-push inflation) occurs

sometimes when overall prices increase (inflation) due to increases in the

cost of wages and raw materials. Higher costs of production can
classified into decrease the aggregate supply (the amount of total production)

three types in the economy.

▪ Built-in inflation occurs when workers expect their salaries or

wages to increase when prices of goods and services increase to
help maintain their living costs. Built-in inflation can be viewed
as a double-edged sword. As laborers demand higher pay, the
cost of production increases, which can raise the cost of living.
 ▪ While it is easy to measure the price changes of individual
products over time, human needs extend beyond just one or
two products.

▪ Individuals need a big and diversified set of products as well as

a host of services for living a comfortable life. They include

Understandin commodities like food grains, metal, fuel, utilities like

electricity and transportation, and services like health care,
g inflation entertainment, and labor.

▪ Inflation aims to measure the overall impact of price changes

for a diversified set of products and services. It allows for a
single value representation of the increase in the price level of
goods and services in an economy over a period of time.
▪ Inflation occurs when a nation’s money supply growth outpaces
economic growth.

▪ To combat this, the monetary authority (in most cases, the

central bank) takes the necessary steps to manage the money
supply and credit to keep inflation within permissible limits and
keep the economy running smoothly.

▪ Theoretically, monetarism is a popular theory that explains the

relation between inflation and the money supply of an economy.
For example, following the Spanish conquest of the Aztec and
Inca empires, massive amounts of gold and especially silver
flowed into the Spanish and other European economies.

▪ Since the money supply rapidly increased, the value of money

fell, contributing to rapidly rising prices.
▪ The change in the Consumer Price Index for All
Urban Consumers (CPI-U) over the 12-month
period ending August 2022.
▪ When you factor out food and energy, the index
rose 0.6% compared to an increase of 0.3% in duly
over a 12-month period.
▪ Prices rise, which means that one unit of money
buys fewer goods and services. This loss of
purchasing power impacts the cost of living for the
common public which ultimately leads to a
deceleration in economic growth. The consensus
view among economists is that sustained.
 ▪ An increase in the supply of money is the root of inflation,
though this can play out through different mechanisms in the
economy. A country’s money supply can be increased by the
monetary authorities by printing and giving away more money
to citizens.
CAUSES OF ▪ Legally devaluing (reducing the value of) the legal tender
INFLATION currency.

▪ Loaning new money into existence as reserve account credits

through the banking system by purchasing government bonds
from banks on the secondary market (the most common
method)
THANK YOU AND GOD BLESS .