Inflation — Important Questions

Prices rise continuously, Prices rise at a faster rate, Prices rise over a long period

Inflation features include continuous price rises, faster rate of increase, and persistence over long periods. Not all goods increase equally, and one-time increases don't constitute inflation.

Walking inflation, Running inflation, Hyperinflation

Walking, running, and hyperinflation are harmful as they create economic instability. Only creeping inflation (1-3%) is beneficial for growth.

Excess demand inflation

Demand pull inflation is also called 'excess demand inflation' because it occurs when aggregate demand exceeds the available supply at current prices.

Increase in money supply, Increase in population, Increase in export demand

Demand pull inflation is caused by factors that increase demand: more money supply, higher population, and increased exports. Rise in wages and higher taxes cause cost push inflation.