What are the characteristics of Inflation?


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  1. Inflation is a dynamic process.

 

  1. 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.

 

  1. 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.

 

  1. The main characteristics of inflation is surplus of demand over supply

 

  1. 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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