Author: Prabhu TL.
Impacts of Inflation
Inflationary pressure in an economy my generate good effects on the economy, particularly in case of ‘creeping’ or ‘walking’ inflation.…
True & Semi-inflation
True inflation • It takes place after full employment of all factor inputs in an economy. • In a situation…
Hyper & Moderate Inflation
Hyper Inflation • The price level goes on rising at a very fast rate. • Often there happens hourly increase…
Cost Push & Open Inflation
Cost Push Inflation • Inflation may originate from supply side also. • Aggregate demand remaining unchanged, a fall in aggregate…
Determinants of demand
There are many factors other than price that can affect the level of quantity demanded. This defines demand function. (i)…
Forms of Inflation
Inflation may be of different forms, such as: Demand Pull Inflation • When in an economy aggregate demand exceeds aggregate…
The Quantity Theory by Keynes
• Keynes reformulated the Quantity Theory of Money. • In his opinion the quantity of money does not directly affect…
Cash Balance Approach
• It states that it is not total money but that portion of cash balance people spend that influences price…
QUANTITY THEORY OF MONEY
Quality theory of Money can be analysed by two different approaches: (1) Fisher’s Theory (2) Cash Balance Approach Fisher’s Theory…
GRESHAM’S LAW
he Law states that bad money drives good money out of circulation. This is true in case of bimetallism where…