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  • Inflation: Amity Business School

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    keerthika12311
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    The document summarizes information about inflation from Amity Business School. It defines inflation as a rise in general price levels and outlines different types like creeping, walking, running, and hyper inflation. It then lists factors that can cause inflation, such as increases in money supply, public spending, wages, and supply shocks. The effects of inflation discussed include reduced purchasing power, impacts on production, income distribution, balance of payments, and social stability. Finally, it presents several methods that can be used to control inflation, such as monetary policy, income policies, increasing goods availability, fiscal policy, price controls, and rationing.

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    This is a presentation on Inflation that we made for Economics class

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    Inflation- Presentation

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    The document summarizes information about inflation from Amity Business School. It defines inflation as a rise in general price levels and outlines different types like creeping, walking, running, and hyper inflation. It then lists factors that can cause inflation, such as increases in money supply, public spending, wages, and supply shocks. The effects of inflation discussed include reduced purchasing power, impacts on production, income distribution, balance of payments, and social stability. Finally, it presents several methods that can be used to control inflation, such as monetary policy, income policies, increasing goods availability, fiscal policy, price controls, and rationing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Als PPT, PDF, TXT herunterladen oder online auf Scribd lesen
    Markieren Sie unangemessene Inhalte
    259 Ansichten15 Seiten

    Inflation: Amity Business School

    Hochgeladen von

    keerthika12311
    The document summarizes information about inflation from Amity Business School. It defines inflation as a rise in general price levels and outlines different types like creeping, walking, running, and hyper inflation. It then lists factors that can cause inflation, such as increases in money supply, public spending, wages, and supply shocks. The effects of inflation discussed include reduced purchasing power, impacts on production, income distribution, balance of payments, and social stability. Finally, it presents several methods that can be used to control inflation, such as monetary policy, income policies, increasing goods availability, fiscal policy, price controls, and rationing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Als PPT, PDF, TXT herunterladen oder online auf Scribd lesen
    Markieren Sie unangemessene Inhalte
    von 15

    Amity Business School

    INFLATION

    Prepared by:

    R.Keerthika
    Nitika Choudhary

    M.B.A (GEN)- 2011


    ABS
    Amity Business School

    What is Inflation
     It is a rise in the general level of prices of
    goods and services
     It is continuous and considerable
     Inflation is also an erosion in the purchasing
    power of money
    Amity Business School

    Types of Inflation
    1. Creeping: 3% annual rise
    2. Walking or Trotting: Rise between 3% to 6%
    3. Running: Over 8% rise
    4. Hyper Inflation or Galloping: 20% to 30% rise
    5. Open: No limit to price rise
    6. Suppressed: Administrative measures
    Amity Business School

    Causes
    Amity Business School

    Demand Side Supply Side

    1. Increase in Money Supply


    1. Higher Wage Rate
    2. Deficit Financing
    2. Higher Taxes
    3. Increase in Public Expenditure
    3. Higher Administered prices
    4. Increase in Investment Expenditure
    4. Supply Shocks
    5. Increase in Export Demand
    5. Hoarding
    6. Increase in Population
    Amity Business School

    Effects
    Amity Business School

     Effects on Production
    1) Uncertainty in economy: Investment and production activities reduce
    2) Affects patterns of production: Resources directed towards luxuries
    3) Causes misallocation of resources: Hoarding
    4) Encourages speculation: Quick and easy profits
    5) Reduces degree of competition: Inefficient producers are protected

     Effects on Distribution of Income


    1) Debtors and Creditors: Debtors gain, creditors lose
    2) Profit earners: Sharp profits
    3) Wage earners and Salaried class: Lose
    4) Investors: Big investors gain, fixed-interest investors lose
    5) Pensioners: Lose
    6) Farmers: As a group gain, small farmers lose
    Amity Business School

     Adverse effect on Savings: Reduced purchasing power

     Effects on balance of payments: Imports increase, exports decrease

     Effects on public revenue: More revenue earned from indirect taxes

     Confidence in currency: Reduces

     Social and Moral degradation: Burglary etc.

     Political Instability: Major issue


    Amity Business School

    How to Control
    Inflation
    Amity Business School

    Monetary Policy

    1. Quantitative Credit Controls


    Steps are taken by the RBI to reduce supply of money through credit
    (a) Interest Rates (b) Open Market Operations (c) Variable Cash Reserve Ratio

    2. Qualitative Credit controls


    Central banks are persuaded or forced by RBI to limit loans given
    (a) Rationing of credit (b) Moral Suasion (c) Publicity
    (d) Direct Action
    Amity Business School

    Income Policies

    Also called Direct Wage Control

     Income in tune with production

    Trade unions make it difficult


    Amity Business School

    Increasing Availability of Goods

     Increase the production of essential consumer goods

     Raw materials for such products may be imported

     Latest technology must be used


    Amity Business School

    Fiscal Policy

     Public Expenditure: Reduce

     Public Borrowing: Increase

     Taxation: Increase
    Amity Business School

    PRICE CONTROL AND


    RATIONING

     Maximum prices of commodities are fixed

     Goods are allocated to ration card holders

     Encourages Black-Marketing
    Amity Business School

    Thank You

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