Inflation
- It is a situation characterized by a gradual, sustained, unchecked rise in price level observed over a period of time which generates expectations of a further rise.
- Hyper inflation is a situation in which there is a fast rise in general price level even to the extent that it may rise each day leading to short fall in value of money.
People lose faith in domestic currency.
Govt shifts to some hard currency as an alternate currency, also called galloping Inflation.
- Stagflation is a situation in which inflation coexists with recession, unemployment and business permission.
- Recession is a situation characterized by declining demand, declining investment and business permission.
- Demand pull inflation refers to general rise in price level due to rise in demand of goods and services.
This can be due to
