{"id":9764,"date":"2019-09-26T23:43:17","date_gmt":"2019-09-26T18:13:17","guid":{"rendered":"https:\/\/entri.app\/blog\/?p=9764"},"modified":"2019-09-27T10:30:15","modified_gmt":"2019-09-27T05:00:15","slug":"inflation-in-india","status":"publish","type":"post","link":"https:\/\/entri.app\/blog\/inflation-in-india\/","title":{"rendered":"Inflation in India-Everything You Need to Know"},"content":{"rendered":"

Inflation in India is an important topic that should be covered by anyone who is preparing for banking <\/a>exams and many other public exams<\/a>. Inflation is one of the most significant economic issue. It even affects our everyday lives through rise in prices and also influences our savings in various ways. In this blog, we discuss about inflation, its types and some important points in this regard.<\/p>\n

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Inflation in India-Everything You Need to Know<\/h2>\n

Let us start with the definition of inflation. It is an economic condition in which the prices of all goods and services increases. Inflation reduces the purchasing power of each unit of currency, that is the amount of goods and services that can be purchased with a unit of currency.<\/p>\n

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Causes of Inflation<\/strong><\/p>\n

There are many causes of inflation such as increased money supply, higher wages, devaluation-rising import prices, cut in interest rates, rising oil prices, higher taxes etc.<\/p>\n

Types of Inflation<\/strong><\/p>\n

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  1. Based on Rate :\u00a0 Moderate Inflation, Galloping Inflation and Hyper Inflation<\/li>\n
  2. Based on Cause : Cost-push Inflation and Demand-pull Inflation<\/li>\n<\/ol>\n

    Cost-push Inflation\u00a0<\/span><\/p>\n

    This type of Inflation is due to an overall increase in the cost of production. It is caused by increase in costs of raw materials, labour, fuel. As a result of this rise in prices, manufacturers produce less which leads to a decrease in total supply. Increase in oil price, calamities such as flood etc. cause this type of inflation.<\/p>\n

    Demand-pull Inflation<\/span><\/p>\n

    This is type of Inflation is due to an increase in aggregate demand over the available output which in turn leads to a rise in prices. In this situation, aggregate supply cannot increase proportionately with aggregate demand.<\/p>\n

    Optimal Inflation Rates<\/strong><\/p>\n