DEFINITION OF INFLATION
- economic tools for nation building
- factors affecting the expansion of industries
- mineral resources and the mining industries
- demand and supply
- types of demand curve and used
- advertising industry
- factors of production
- joint stock company
- public enterprises
- private enterprises
- limited liability companies
- market concept
- money market
- how companies raises funds for expansion
TYPES OF INFLATION
There are four main types of inflation. These are: Demand-pull inflation: Demand-pull inflation occurs when consumers have high purchasing power, leading to increases in aggregate demand without a corresponding increase in supply. In other words, this types of inflation occurs when the demand for goods and services is greater than their supply. The factors responsible for this type of inflation may be due to population increase; increase in workers’ salaries and wages.
- Cost-push inflation: Cost-push inflation occurs when increases in cost of production are passed on to consumer in the form of high prices of goods and services are pushed up by rising costs.
Hyper-inflation: Hyper-inflation, also known as galloping or run-away inflation, occurs when a persistent inflation becomes uncontrollable and the value of money keeps declining rapidly. Prices of goods and services rise at a fast rate, leading to money loosing its value or its ability to buy goods. War, budget deficits, etc are the major cases of hyper-inflation.
Persistent or creeping types of inflation: Persistent or creeping inflation, also known as chronic inflation, occurs when there is a slow but steady rise in the volume of purchasing power and fall in supply of goods and services. In other words, when inflation involves a slow but steady rise in the general prices of goods and services, it is known as creeping inflation.