- Inflation is a dynamic process.
- This process is not recognizing in its initial stage. A stage increase in price level is not termed as inflation instead of continue. Increase in price is inflation.
- Increase in price always takes place in broader area, means to say, inflation generally causes increase in prices of all commodities, not only in prices of some special goods.
- The main characteristics of inflation is surplus of demand over supply
- Inflation can be studied through two theories :
1) Demand Pull inflation 2) Cost push inflation.
Inflation hits the middle and poor class of society It results in decline the purchasing power of consumers.
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