Inflation - Inflation This is the second serious problem...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Inflation This is the second serious problem that worries modern public authorities. Ordinarily inflation is associated with rising price conditions. But to be accurate we can define inflation as a situation under which general level of prices shows tendency of cumulative and continuous upward rise . For rising prices to be considered inflationary, all these three conditions must be satisfied. In the first place, the rising trends of the prices should be general and not sectional. Consumers and producers, goods, raw materials, interest rate , wages, imports and exports prices should all contain an element of inflationary pressure . In the second place, such price changes must be cumulative in the sense that the prices of finished products should have risen because of higher prices of raw materials, or the prices of goods should have risen because of higher wages and vice versa. Finally, inflationary price rise should be continuous. The rounds of rising prices should be repeated month after month and year after year. Inflationary situations in almost all parts of the world have become very common in the post
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

Page1 / 2

Inflation - Inflation This is the second serious problem...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online