essay on inflation for class 7

Essay on Inflation in India

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100 Words Essay on Inflation in India

Understanding inflation.

Inflation is the rate at which the general level of prices for goods and services is rising. It erodes purchasing power, each unit of currency buys fewer goods and services.

Inflation in India

Impact on economy.

High inflation impacts the economy negatively. It reduces the value of money, creates uncertainty, and can lead to less economic growth.

Controlling Inflation

The Reserve Bank of India uses monetary policy to control inflation. It adjusts interest rates and reserves to manage money supply.

250 Words Essay on Inflation in India

Introduction, causes of inflation.

India’s inflation is primarily driven by supply-side factors. These include agricultural output fluctuations due to unpredictable monsoons, global commodity price changes, and supply chain disruptions. On the demand side, rapid economic growth, rising incomes, and increased government spending can also contribute to inflationary pressure.

Impacts of Inflation

Inflation impacts India in several ways. It reduces the real income of people, especially the poor and those on fixed incomes. High inflation can also deter investment, as it creates uncertainty about future prices, thereby hindering economic growth.

Managing Inflation in India

The Reserve Bank of India (RBI) plays a pivotal role in managing inflation through monetary policy. The RBI uses tools like the repo rate, reverse repo rate, and cash reserve ratio to control money supply and thus, inflation.

While inflation is a complex issue with multiple causes and effects, prudent economic policies and efficient supply chain management can help mitigate its impacts. It is crucial for India to strike a balance between growth and inflation control to ensure sustainable economic development.

500 Words Essay on Inflation in India

Inflation, a sustained rise in the general level of prices for goods and services, is a fundamental economic concept impacting nations worldwide. In India, it has been a persistent issue, influencing the economic stability and growth trajectory of the nation.

Causes of Inflation in India

Another significant cause is the cost-push inflation, where the rising cost of production, including wages, raw materials, and overheads, pushes up the prices of final goods and services. Additionally, India’s dependence on oil imports often leads to inflation due to fluctuations in global oil prices.

Impact of Inflation

Inflation impacts the Indian economy and its citizens in numerous ways. It erodes the purchasing power of money, meaning people have to spend more to buy the same quantity of goods and services. This situation is particularly harsh for those with fixed incomes, such as pensioners.

Inflation also creates uncertainty in the economy, discouraging investment and savings, and potentially leading to lower economic growth. Moreover, it can lead to income redistribution, benefiting those who can hedge against inflation and disadvantaging those who cannot.

Measures to Control Inflation

Another measure is the regulation of money supply through open market operations. By selling government securities, the RBI can absorb excess liquidity from the market, thereby reducing the money supply and controlling inflation.

If you’re looking for more, here are essays on other interesting topics:

Apart from these, you can look at all the essays by clicking here .

Essays on Inflation

Inflation essay topics and outline examples, essay title 1: understanding inflation: causes, effects, and economic policy responses.

Thesis Statement: This essay provides a comprehensive analysis of inflation, exploring its root causes, the economic and societal effects it generates, and the various policy measures employed by governments and central banks to manage and mitigate inflationary pressures.

Introduction
Defining Inflation: Concept and Measurement
Causes of Inflation: Demand-Pull, Cost-Push, and Monetary Factors
Effects of Inflation on Individuals, Businesses, and the Economy
Inflationary Policies: Central Bank Actions and Government Interventions
Case Studies: Historical Inflationary Periods and Their Consequences
Challenges in Inflation Management: Balancing Growth and Price Stability

Essay Title 2: Inflation and Its Impact on Consumer Purchasing Power: A Closer Look at the Cost of Living

Thesis Statement: This essay focuses on the effects of inflation on consumer purchasing power, analyzing how rising prices affect the cost of living, household budgets, and the strategies individuals employ to cope with inflation-induced challenges.

Inflation's Impact on Prices: Understanding the Cost of Living Index
Consumer Behavior and Inflation: Adjustments in Spending Patterns
Income Inequality and Inflation: Examining Disparities in Financial Resilience
Financial Planning Strategies: Savings, Investments, and Inflation Hedges
Government Interventions: Indexation, Wage Controls, and Social Programs
The Global Perspective: Inflation in Different Economies and Regions

Essay Title 3: Hyperinflation and Economic Crises: Case Studies and Lessons from History

Thesis Statement: This essay explores hyperinflation as an extreme form of inflation, examines historical case studies of hyperinflationary crises, and draws lessons on the devastating economic and social consequences that result from unchecked inflationary pressures.

Defining Hyperinflation: Thresholds and Characteristics
Case Study 1: Weimar Republic (Germany) and the Hyperinflation of 1923
Case Study 2: Zimbabwe's Hyperinflationary Collapse in the Late 2000s
Impact on Society: Currency Devaluation, Poverty, and Social Unrest
Responses and Recovery: Stabilizing Currencies and Rebuilding Economies
Preventative Measures: Policies to Avoid Hyperinflationary Crises

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Lesson of the Day: ‘Inflation Has Arrived. Here’s What You Need to Know.’

U.S. inflation is at a 40-year high. In this lesson, students will learn about why prices rise or fall over time and what it means for the nation.

By Jeremy Engle

Lesson Overview

Featured Article: “ Inflation Has Arrived. Here’s What You Need to Know. ” by Jeanna Smialek

Have you noticed any prices going up? Say for food, gas or rent? Or for things like bikes or burritos?

The Times reported on Jan. 12 that inflation , as tracked by the Consumer Price Index, is rising at its highest rate since 1982. But what exactly is inflation, what is causing prices to go up and why are many economists worried about its continued rise?

In this lesson, you will learn about inflation and what the current rise in prices means for you, your family and your community. In a Going Further activity, you will act as an economic adviser to President Biden and make a recommendation for how to best tackle the problem.

What do you know about inflation? What do you want to know?

Have you and your family talked about rising prices? Has the higher cost of things affected what you buy and whether you save money?

Part 1. Watch a video

Watch the two-minute video above by the BBC News explaining what inflation means and why it’s happening now in Britain. Then, in writing or through discussion with a partner, respond to the following prompts:

In your own words, what is inflation?

According to the video, what is one reason inflation is happening right now?

How does inflation affect consumers?

Part 2: Analyze and Interpret a Graph

Year-over-year percent change

in the Consumer Price Index

without food

Year-over-year percent change in the Consumer Price Index

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IAS Preparation
UPSC Preparation Strategy

According to data released by the National Statistical Office (NSO) as of February 2023, India’s retail inflation once again increased to 6.52% in January 2023 after a two-month streak below the 6% mark mainly due to an increase in food inflation driven by higher prices of cereals and products.

Hence, the topic, ‘Inflation’ becomes important for the IAS Exam .

What is Inflation? In economics, inflation (or less frequently, price inflation) is a general rise in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.

As per RBI , an inflation target of 4 per cent with a +/-2 per cent tolerance band, is appropriate for the next five years (2021-2025).

Inflation Latest News [Feb 2023]

The retail inflation based on the Combined Price Index (Combined) had reduced to 5.72% in December 2022.
Also, the Combined food price inflation (CFPI) increased to 5.94% in January 2023 as compared to 4.19% in December 2022 and 5.43% in the year-ago period.
And, urban consumers have experienced a retail price rise of 6% in January 2023 as compared to 5.4% in December 2022.
Economists believe that the higher-than-expected increase in January’s prices may continue for a few more months on account of ongoing pass-through of higher input costs by producers, amidst robust demand for services and may force the RBI to consider yet another rate hike in its next monetary policy review.
According to the latest data, Telangana recorded the highest inflation in January at 8.6% among the major States which was followed by Andhra Pradesh (8.25%), Madhya Pradesh (8.13%), Uttar Pradesh (7.45%) and Haryana (7.05%).
Furthermore, the core inflation which includes non-food and non-fuel components also remained sticky at 6.1% in January 2023 which indicates pricing power from the suppliers and manufacturers.

Significance of the spike in inflation in January 2023:

After making a high in September at 7.4%, the inflation rate has been declining and reached 5.7% in December ’22.
As a surprise to everyone, MPC which met in February, increased the repo rate by 25 basis points (0.25%), indicating that RBI was not believing that inflation was under control.
Recently published official data now shows that in January the rate of inflation increased to 6.5%, indicating that RBI might go for a further increase in repo rate when MPC meet again in April ’23.
In light of the new figures, it looks highly likely that inflation figures in India will remain above the crucial 4% (4% is the target level under the current monetary policy regime).

Retail inflation from 2019 to 2021 estimates for 2022 24

If the rate of inflation remains at high levels, RBI will be forced to increase the repo rate. This could make borrowing costlier, will have a negative impact on investment and will thus hurt the economic recovery, especially from the twin shocks of Covid19 pandemic and the Russia-Ukraine war.

What caused the spike in January ’23?

There were 2 main reasons for the spike in inflation and they are:

Higher food inflation as a result of the spike in cereal prices.
Higher core inflation: It provides the underlying inflation of the economy. Core inflation rose from 6.1% to 6.2% and super core inflation rose to 6.3% from 6.2%.

Image source: Indian Express

What is causing India’s inflation to persist?

The initial shock of rising food and fuel prices gradually spread and became more widespread in the following months, resulting in persistent core inflation that remained high.
Despite weak demand and limited pricing power, input cost pressures were unprecedented and resulted in higher output prices, particularly for goods.
As the direct impact of the conflict diminished and global commodity prices eased, the domestic economy began to recover and demand increased, leading to the pass-through of pent-up input costs. And this resulted in the persistence of elevated inflationary pressures.
Core goods inflation increased to 7.6% year on year in January from 7.5% in December.
It is not just India, the US and many other EuroZone countries are also affected by the sticky inflation.

Additional Information:

Core inflation: It is the measure of inflation calculated after deducting the prices of food and fuel.
Super core inflation: It is the measure of inflation calculated after deducting the gold and silver price inflation from the core inflation.

, check the following links:

Inflation (UPSC Notes):- Download PDF Here

Types of Inflation

The different types of inflation in an economy can be explained as follows:

Demand-Pull Inflation

This type of inflation is caused due to an increase in aggregate demand in the economy.

Causes of Demand-Pull Inflation:

A growing economy or increase in the supply of money – When consumers feel confident, they spend more and take on more debt. This leads to a steady increase in demand, which means higher prices.
Asset inflation or Increase in Forex reserves – A sudden rise in exports forces a depreciation of the currencies involved.
Government spending or Deficit financing by the government – When the government spends more freely, prices go up.
Due to fiscal stimulus.
Increased borrowing.
Depreciation of rupee.
Low unemployment rate.

Effects of Demand-Pull Inflation:

Shortage in supply
Increase in the prices of the goods (inflation).
The overall increase in the cost of living.

Cost-Push Inflation

This type of inflation is caused due to various reasons such as:

Increase in price of inputs
Hoarding and Speculation of commodities
Defective Supply chain
Increase in indirect taxes
Depreciation of Currency
Crude oil price fluctuation
Defective food supply chain
Low growth of Agricultural sector
Food Inflation
Interest rates increased by RBI

Cost pull inflation is considered bad among the two types of inflation. Because the National Income is reduced along with the reduction in supply in the Cost-push type of inflation.

Built-in Inflation

This type of inflation involves a high demand for wages by the workers which the firms address by increasing the cost of goods and services for the customers.

Also, read about Inflation Targeting in the linked article.

Remedies to Inflation

The different remedies to solve issues related to inflation can be stated as:

Monetary Policy (Contractionary policy)

The monetary policy of the Reserve Bank of India is aimed at managing the quantity of money in order to meet the requirements of different sectors of the economy and to boost economic growth.

This contractionary policy is manifested by decreasing bond prices and increasing interest rates. This helps in reducing expenses during inflation which ultimately helps halt economic growth and, in turn, the rate of inflation.

Monetary policy is often seen separate from fiscal policy which deals with taxation, spending by government and borrowing. Monetary policy is either contractionary or expansionary.
When the total money supply is increased rapidly than normal, it is called an expansionary policy while a slower increase or even a decrease of the same refers to a contractionary policy.
It deals with the Revenue and Expenditure policy of the government.

Tools of fiscal policy

Direct Taxes and Indirect taxes – Direct taxes should be increased and indirect taxes should be reduced.
Public Expenditure should be decreased (should borrow less from RBI and more from other financial institutions)

To know more about the Fiscal policy in India , refer to the linked article.

Import commodities that are in short supply
Decrease exports
Govt may put a check on hoarding and speculation
Distribution through Public Distribution System (PDS) .

Measurement of Inflation

Wholesale Price Index (WPI) – It is estimated by the Ministry of Commerce & Industry and measured on a monthly basis.
Consumer Price Index (CPI) – It is calculated by taking price changes for each item in the predetermined lot of goods and averaging them.
Producer Price Index – It is a measure of the average change in the selling prices over time received by domestic producers for their output.
Commodity Price Indices – It is a fixed-weight index or (weighted) average of selected commodity prices, which may be based on spot or futures price
Core Price Index – It measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices. It is a way to measure the underlying inflation trends.
GDP deflator – It is a measure of general price inflation.

Know more about the Cash reserve ratio in this article.

Effect of Inflation on the Economy

The effect of inflation on the economy can be stated as:

The effect of inflation is not distributed evenly in the economy. There are chances of hidden costs for different goods and services in the economy.
Sudden or unpredictable inflation rates are harmful to an overall economy. They lead to market instability and thereby make it difficult for companies to plan a budget for the long-term.
Inflation can act as a drag on productivity as companies are forced to mobilize resources away from products and services to handle the situations of profit and losses from inflation.
Moderate inflation enables labour markets to reach equilibrium at a faster pace.

Important Terms related to Inflation

Disinflation: Reduction in the rate of inflation
Deflation: Persistent decrease in the price level (negative inflation)
Reflation: Price level increases when the economy recovers from recession based on value of inflation
Creeping inflation – If the rate of inflation is low (upto 3%)
Walking/Trotting inflation – Rate of inflation is moderate (3-7%)
Running/Galloping inflation – Rate of inflation is high (>10%)
Runaway/Hyper Inflation – Rate of inflation is extreme
Stagflation: Inflation + Recession (Unemployment)
Misery index: Rate of inflation + Rate of unemployment
Inflationary gap: Aggregate demand > Aggregate supply (at full employment level)
Deflationary gap: Aggregate supply > Aggregate demand (at full employment level)
Suppressed / Repressed inflation: Aggregate demand > Aggregate supply. Here govt will not allow rising of prices.
Open inflation: A situation where price level rises without any price control measures by the government.
Core inflation: Based on those items whose prices are non-volatile.
Headline inflation: All commodities are covered in this.
Structural inflation: Due to structural problems like infrastructural bottlenecks.

Learn Important Economic terms for UPSC in the linked article.

FAQ about Inflation

Why is inflation bad for the economy, who decides inflation rate in india.

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Essay on Inflation

Essay generator.

Inflation is a term that resonates through the corridors of our daily lives, affecting decisions made by individuals, businesses, and governments alike. It refers to the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, to keep the economy running smoothly. This essay delves into the causes of inflation, its various effects on the economy and individuals, and the strategies employed to manage it, aiming to provide a comprehensive understanding suitable for a student participating in an essay writing competition.

The Causes of Inflation

Inflation is primarily caused by two factors: demand-pull and cost-push inflation. Demand-pull inflation occurs when demand for goods and services exceeds supply, causing prices to rise. This can happen due to increased consumer spending, government expenditure, or investment. Cost-push inflation, on the other hand, happens when the cost of production increases, leading producers to raise prices to maintain their profit margins. This increase in production costs can be due to rising wages, increased taxes, or higher prices for raw materials.

Demand-pull inflation occurs when the overall demand for goods and services in an economy exceeds its supply. This excess demand leads to rising prices as businesses raise prices to capitalize on increased consumer demand.
Factors contributing to demand-pull inflation include robust consumer spending, increased government spending, low-interest rates, and high levels of investment.
Cost-push inflation is driven by rising production costs, which are then passed on to consumers in the form of higher prices. These rising costs can result from various factors, such as increased wages, higher energy prices, or supply chain disruptions.
For example, if oil prices spike, it can lead to increased transportation costs, which may cause businesses to raise prices on their products.
Built-in inflation, also known as the wage-price spiral, occurs when workers demand higher wages to keep up with rising prices. When businesses pay higher wages, they often pass those costs on to consumers, causing prices to rise further. This cycle can continue, perpetuating inflation.
Expectations of future inflation can also contribute to built-in inflation, as people adjust their behavior and spending patterns in anticipation of rising prices.
The policies of central banks, such as the Federal Reserve in the United States, can influence inflation. When central banks implement loose monetary policies, such as low-interest rates and quantitative easing, it can increase the money supply and potentially lead to demand-pull inflation.
Central banks can also use tight monetary policies, such as raising interest rates, to combat inflation and reduce spending.
Government fiscal policies, including changes in taxation and government spending, can affect inflation. An increase in government spending without corresponding revenue sources can stimulate demand and contribute to inflation.
Tax cuts can also increase disposable income, leading to higher consumer spending and potential demand-pull inflation.
Exchange rate fluctuations can impact inflation by influencing the prices of imported goods. A depreciating domestic currency can make imports more expensive, contributing to cost-push inflation.
Conversely, a strengthening currency can lower import prices and help reduce inflation.
Unforeseen events, such as natural disasters, geopolitical tensions, or disruptions in the supply chain, can cause sudden supply shortages or surpluses. These shocks can result in sharp price movements and contribute to inflation.
For instance, a severe drought can reduce agricultural output, leading to higher food prices.
Global economic conditions and trends, such as changes in international commodity prices or global economic growth, can influence inflation in individual countries.
Economic policies in major trading partners can also have spill-over effects on domestic inflation.

The Effects of Inflation

Inflation impacts various facets of the economy and society. Moderate inflation is a sign of a growing economy, but high inflation can have detrimental effects.

Economic Effects

1. Reduced Purchasing Power: Inflation erodes the purchasing power of money, meaning consumers can buy less with the same amount of money. This reduction can impact living standards and consumer spending.

2. Income Redistribution: Inflation can act as a regressive tax, hitting harder on low-income families. Fixed-income recipients, such as pensioners, find their incomes do not stretch as far, while borrowers may benefit from repaying loans with money that is worth less.

3. Investment Uncertainty: High inflation can lead to uncertainty in the investment market. Investors become wary of long-term investments due to the unpredictability of future costs and returns.

Social Effects

1. Cost of Living: As the cost of goods and services increases, individuals may struggle to afford basic necessities, leading to a lower quality of life.

2. Wage-Price Spiral: Continuous inflation can lead to a wage-price spiral, where workers demand higher wages to keep up with rising prices, which in turn causes prices to rise further.

3. Access to Education and Healthcare: Rising costs can make education and healthcare less accessible to the general population, affecting long-term social and economic development.

Managing Inflation

Governments and central banks use various tools to manage inflation, aiming to maintain it at a level that promotes economic stability and growth.

Monetary Policy

The most common tool for managing inflation is monetary policy, which involves regulating the money supply and interest rates. Central banks can increase interest rates to reduce spending and borrowing, thereby slowing down the economy and reducing inflation. Conversely, lowering interest rates can stimulate spending and investment, increasing demand and potentially causing inflation.

Fiscal Policy

Governments can also use fiscal policy to control inflation by adjusting spending and taxation. Reducing government spending or increasing taxes can decrease the overall demand in the economy, lowering inflation. However, these measures can be unpopular politically as they may lead to reduced public services and higher taxes.

Supply-Side Policies

Improving efficiency and increasing supply can also combat inflation. This can be achieved through investment in technology, deregulation, and policies aimed at increasing productivity. By increasing the supply of goods and services, prices can stabilize or even decrease.

In conclusion, Inflation is a complex phenomenon with wide-ranging effects on the economy and society. Understanding its causes and impacts is crucial for effective management and policy-making. While moderate inflation is a sign of a healthy economy, unchecked inflation can lead to significant economic and social challenges. Through a combination of monetary, fiscal, and supply-side policies, governments and central banks strive to balance inflation to ensure economic stability and growth. As students delve into the intricacies of inflation, they gain insight into the delicate balance required to manage an economy, preparing them for informed citizenship and, possibly, roles in shaping economic policy in the future.

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Economic essays on inflation

Definition – Inflation – Inflation is a sustained rise in the cost of living and average price level.
Causes Inflation – Inflation is caused by excess demand in the economy, a rise in costs of production, rapid growth in the money supply.

Costs of Inflation – Inflation causes decline in value of savings, uncertainty, confusion and can lead to lower investment.

Problems measuring inflation – why it can be hard to measure inflation with changing goods.
Different types of inflation – cost-push inflation, demand-pull inflation, wage-price spiral,
How to solve inflation . Policies to reduce inflation, including monetary policy, fiscal policy and supply-side policies.
Trade off between inflation and unemployment . Is there a trade-off between the two, as Phillips Curve suggests?
The relationship between inflation and the exchange rate – Why high inflation can lead to a depreciation in the exchange rate.
What should the inflation target be? – Why do government typically target inflation of 2%
Deflation – why falling prices can lead to negative economic growth.
Monetarist Theory – Monetarist theory of inflation emphasises the role of the money supply.
Criticisms of Monetarism – A look at whether the monetarist theory holds up to real-world scenarios.
Money Supply – What the money supply is.
Can we have economic growth without inflation?
Predicting inflation
Link between inflation and interest rates
Should low inflation be the primary macroeconomic objective?

Essay on Inflation: Meaning, Measurement and Causes

Let us make in-depth study of the meaning, measurement and causes of inflation.

Meaning of Inflation:

By inflation we mean a general rise in prices. To be more correct, inflation is a persistent rise in general price level rather than a once-for-all rise in it.

Rate of inflation is either measured by the percentage change in wholesale price index number (WPI) over a period or by percentage change in consumer price index number (CPI).

Opinion surveys conducted in India and the United States reveal that inflation is the most important concern of the people as it affects their standard of living adversely A high rate of inflation erodes the real incomes of the people. A high rate of inflation makes the life of the poor people miserable. It is therefore described as anti-poor, inflation redistributes income and wealth in favour of the rich.

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Thus, it makes the rich richer and the poor poorer. Above all, a high rate inflation adversely effects output and encourages investment in unproductive channels such as purchase of gold, silver, jewellery and real estate. Therefore, it adversely affects long-run economic growth, especially in developing countries like India. Inflation has therefore been described ‘as enemy number one’.

Measurement of Rate of Inflation:

Inflation has been one of the important problems facing the economies of the world. Precisely stated, inflation is the rate of change of general price level during a period of time. And the general price level in a period is the result of inflation in the past. Through rate of inflation economists measures the cost of living in an economy. Let us explain how rate of inflation is measured. Suppose P i X represents the price level on 31st March 2006 and P represents the price level on 31st March 2007. Then the rate of inflation in year 2006-07 will be equal to

Thus, rate of inflation during 2006-07 will be 10 per cent. This is called point-to-point inflation rate. There are 52 weeks in a year, average of price indexes of 52 weeks of a year (say 2005-06) can be calculated to compare the average of price indexes of 52 weeks of year 2006-07 and find the inflation rate on the basis of average weekly price levels of a year. In both these ways rate of inflation in different years is measured and compared.

It is evident from above that price level in a period is measured by a price index. There are several commodities in an economy which are produced and consumed by the people. It is through construction of a weighted price index that economists aggregate money prices of several commodities which are assigned different weights.

In India the wholesale price Index (WPI) of all commodities with base year 1993-94 price level at the end of fiscal year is used to measure rate of inflation and is widely reported in the media. Since the wholesale price index does not truly indicate the cost of living, separate Consumer Price Index (CPI) for agricultural labourers and Consumer Price Index (CPI) for industrial workers (with base 1982 = 100) at the end of fiscal year are constructed to measure rate of inflation.

In constructing the Consumer Price Index (CPI) the price of a basket of goods which a typical consumer, industrial worker or agricultural labourer as the case may be are taken into account.

What Causes Inflation?

1. keynes’s view:.

Classical economists thought that it was the quantity of money in the economy that determined the general price level in the economy. According to them, rate of inflation depends on the growth of money supply in the economy. Keynes criticized the ‘ Quantity Theory of Money’ and showed that expansion in money supply did not always lead to inflation or rise in price level.

Keynes who before the Second World War explained that involuntary unemployment and depression were due to the deficiency of aggregate demand, during the war period when price rose very high he explained that inflation was due to excessive aggregate demand. Thus, Keynes put forward what is now called demand-pull theory of inflation.

Demand – Pull Inflation

Thus, according to Keynes, inflation is caused by a situation whereby the pressure of aggregate demand for goods and services exceeds the available supply of output (both begging counted at the prices ruling at the beginning of a period). In such a situation, rise in price level is the natural consequence.

Now, this imbalance between aggregate demand and supply may be the result of more than one force at work. As we know aggregate demand is the sum of consumers’ spending on consumer goods and services, government spending on consumer goods and services and net investment being planned by the entrepreneurs.

But excess of aggregate demand over aggregate supply does not explain persistent rise in prices, year after year. An important factor which feeds inflation is wage-price spiral. Wage-price spiral operates as follows: A rise in prices reduces the real consumption of the wage earners. They will, therefore, press for higher money wages to compensate them for the higher cost of living. Now, an increase in wages, if granted, will raise the prime cost of production and, therefore, entrepreneurs will raise the prices of their products to recover the increment in cost.

This will add fuel to the inflationary fire. A further rise in prices raises the cost of living still further and the workers ask for still higher wages. In this way, wages and prices chase each other and the process of inflationary rise in prices gathers momentum. If unchecked, this may lead to hyper-inflation which signifies a state of affairs where wages and prices chase each other at a very quick speed.

2. Monetarist View:

The Keynesian explanation of demand-pull inflation is important to note that both the original quantity theorists and the modem monetarists, prominent among whom is Milton Friedman, explain inflation in terms of excess demand for goods and services. But there is an important difference between the monetarist view of demand-pull inflation and the Keynesian view of it. Keynes explained inflation as arising out of real sector forces.

In his model of inflation excess demand comes into being as a result of autonomous increase in expenditure on investment and consumption or increase in government expenditure. That is, the increase in aggregate expenditure or demand occurs independent of any increase in the supply of money.

On the other hand, monetarists explain the emergence of excess demand and the resultant rise in prices on account of the increase in money supply in the economy. To quote Milton Friedman, a Nobel Laureate in economics. “Inflation is always and everywhere a monetary phenomenon…… and can be produced only by a more rapid increase in the quantity of money than in output.”

Friedman holds that when money supply is increased in the economy, then there emerges an excess supply of real money balances with the public over their demand for money. This disturbs the monetary equilibrium. In order to restore the equilibrium the public will reduce the money balances by increasing expenditure on goods and services.

Thus, according to Friedman and other modern quantity theorists, the excess supply of real monetary balances results in the increase in aggregate demand for goods and services. If there is no proportionate increase in output, then extra money supply leads to excess demand for goods and services. This causes inflation or rise in prices. Thus, according to monetarists let by Prof. Milton Friedman, excess creation of money supply is the main factor responsible for inflation.

Cost-Push Inflation:

Even when there is no increase in aggregate demand, prices may still rise. This may happen if the costs, particularly the wage costs, increase. Now, as the level of employment increases, the demand for workers rises progressively so that the bargaining position of the workers is enhanced. To exploit this situation, they may ask for an increase in wage rates which are not justifiable either on grounds of a prior rise in productivity or cost of living.

The employers in a situation of high demand and employment are more agreeable to concede to these wage claims because they hope to pass on these rises in costs to the consumers in the form of rise in prices. Therefore, when inflation is caused by rise in wages or hike in other input costs such as rise in prices of raw materials, rise in prices of petroleum products, it is called cost-push inflation. If this happens we have another inflationary factor at work.

Besides the increase in wages of labour without any increase in its productivity, or rise in costs of other inputs there is another factor responsible for cost-push inflation. This is the increase in the profit margins by the firms working under monopolistic or oligopolistic conditions and as a result charging higher prices from the consumers. In the former case when the cause of cost-push inflation is the rise in wages it is called wage-push inflation and in the latter case when the cause of cost-push inflation is the rise in profit margins, it is called profit-push inflation.

In addition to the rise in wage rate of labour and increase in profit margin, in the seventies the other cost-push factors (also called supply shocks) causing increase in marginal cost of production became more prominent in bringing about rise in prices. During the seventies, rise in prices of raw materials, especially energy inputs such a hike in crude oil prices made by OPEC resulted in rise in prices of petroleum products.

For example, sharp rise in world oil prices during 1973-75 and again in 1979-80 produced significant cost-push factor which caused inflation not only in Indian but all over the world. Now, in June-August 2004 again the world oil prices have greatly risen. As a result, in India prices of petrol, diesel, cooking gas were raised by petroleum companies. This is tending to raise the rate of inflation.

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Essay on Inflation

A widespread increase in the costs of goods and services within an economy is referred to as inflation in economics. Typically, the consumer price index (CPI) is used to quantify this. Each unit of currency may purchase fewer products and services as the overall price level rises; as a result, inflation is associated with a decline in the buying power of money. Deflation is the reverse of CPI inflation, which is a drop in the average level of prices for goods and services. The inflation rate, which is the annualised percentage change in a general price index, is a commonly used indicator of inflation. Because household prices do not all rise at the same pace, this goal is generally served by the consumer price index, or CPI.

Inflation and Unemployment

The two terms that people in today's society talk about the most are unemployment and inflation. The two main issues that affect all economies are these two. Although almost everyone is certain that they understand exactly what inflation is, there is still a significant degree of misunderstanding surrounding it since it is hard to describe clearly.

History of Inflation

Throughout history, inflation has always existed whenever money has been utilised as a medium of exchange. In 330 BCE, one of the first inflations ever recorded happened in the reign of Alexander the Great. In the past, when commodity money was in use, economic conditions would determine when periods of inflation and deflation would occur. However, persistent large-scale injections of silver or gold into an economy might result in protracted periods of inflation.

Factors causing Inflation

Many factors, such as shifts in fiscal or monetary policy, shifts in the real demand for goods and services (also known as demand shocks), shifts in the availability of supplies, like during energy crisis (also known as supply shocks), or shifts in inflation expectations, which have the potential to become self-fulfilling, are often blamed for variations in inflation.

Effects of Inflation

Both good and negative effects can be attributed to moderate inflation on economies. The drawbacks would be higher opportunity costs associated with holding money, a lack of certainty about future inflation that could deter saving and investment, and, in the event that inflation picks up speed, shortages of goods as people start stockpiling because they fear future price increases. The reduction of unemployment brought about by nominal wage rigidity, the increased flexibility granted to the central bank in implementing monetary policy, the promotion of loans and investment rather than money hoarding, and the avoidance of deflation-related inefficiencies are all positive outcomes.

Mitigation Strategies

The majority of economists now support a modest and constant pace of inflation. By allowing the labour market to adjust more quickly during a downturn and lowering the possibility that a liquidity trap will prevent monetary policy from stabilising the economy while avoiding the costs associated with high inflation, low (as opposed to zero or negative) inflation lowers the likelihood of economic recessions. Central banks, which oversee monetary policy and often set interest rates and conduct open market operations, are tasked with maintaining a low and steady rate of inflation.

The word comes from the Latin inflare, which means "to blow into or inflate." From a conceptual standpoint, inflation is the overall pattern of prices rather than variations in any one price. For instance, if consumers decide to purchase more cucumbers than tomatoes, the price of cucumbers increases while the price of tomatoes decreases. These adjustments are the result of changing preferences rather than inflation. Inflation is associated with the value of money. When money was backed by gold, the price of gold and the value of money would decrease if additional gold reserves were discovered, which would raise the cost of all other things.

In his seminal essay The General Theory of Employment, Interest, and Money from 1936, John Maynard Keynes highlighted how prices and wages were sticky in the near term but eventually responded to shocks to aggregate demand. These might originate from a variety of causes, such as independent changes in investment, shifts in individual wealth, or changes in interest rates. Demand, monetary policy, and fiscal policy can all be impacted by changes in interest rates and the level of government spending on final consumption, either directly or indirectly, through changes in taxation and disposable income.

Inflation situations

The majority of nations had a significant rise in inflation in 2021–2023, which peaked in 2022. The Labor Department of the United States released statistics on October 12, 2023, indicating that the country's annual inflation rate for the 12 months ending in September was 3.7%. This matched the 3.7% from the prior time frame. Demand and supply shocks are thought to be the major culprits, but inflation expectations appear to be stable overall (as of May 2023). Demand-side factors might include the worldwide COVID-19 pandemic's aftermath and expansionary fiscal and monetary policies, while supply-side factors could include supply chain issues brought on by the pandemic and made worse by increases in oil prices when Russia invaded Ukraine in 2022.

Currency Depreciation

The decline in a currency's buying power is known as inflation. In other words, each monetary unit may purchase less goods and services overall when prices rise generally. Different economic sectors are impacted by inflation differently; some are negatively impacted while others gain from it. For instance, when there is inflation, people who possess tangible assets—stock, real estate, etc.—benefit from an increase in the price or worth of their holdings, which forces others who want to buy them to pay more. The extent to which their income is set will determine their capacity to do so. For instance, increases in worker and pensioner benefits frequently fall short of inflation, and certain individuals have fixed incomes. Additionally, the purchasing power of monetary assets owned by people or organisations will decrease. The actual worth of money (the functional currency) and other goods having a monetary foundation is diminished by price increases, or inflation.

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Effects/ Results of Inflation on Indian Economy

Persistent inflation in an economy can have some very adverse effects. Many problems currently plaguing our economy are results of inflation in our economy. Rapid inflation can disrupt our entire economy can cause a financial crisis in the country. Let us take a look at some of the adverse effects that are results of inflation in the Indian Economy.

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Balance of Payments

India’s current account deficit is around 17 billion dollars for the last quarter of 2018. This is roughly 2.5% of our GDP. This is because for years now India’s imports are mismatched with their exports. With increasing prices of goods in India, exports have seen a further decline. And the imports have actually become cheaper. So the current account deficit will continue to be a problem for our economy.

Industrial Sector

India has seen a stagnation in the industrial growth in the last few years. The industrial growth for the month of February 2019 year-on-year was merely 0.1%. This is because inflation has adversely affected the industrial sector as well.

The rising prices mean that the factors of production like labor and raw materials have also become expensive. The profit margins of the companies are decreasing. And after an extent, the companies pass on the burden of these additional expenses to the final consumer. And the entire economy suffers.

Final Consumer

The person most affected by rising inflation is the final consumer of goods. The prices of goods and services are constantly rising. But the salaries and income of consumer do not rise proportionately, there is a lag. So the goods and services become less affordable to these final consumers. And the population in the lowest income group are the most affected. They cannot even afford basic necessities.

Investments

One of the major results of inflation in an economy is the general slowdown of the economy. When this happens unemployment rates rise, the purchasing power of the consumer decreases, credit becomes expensive. All these cause a strain on the entire financial system of the country. It discourages heavy investment in the economy by both domestic and international players.

Solved Question on Results of Inflation

Q: Can inflation have a positive impact on the economy?

Ans: Yes, in fact, inflation can have a positive impact on the economy. If it is creeping inflation of about 2%, then it promotes economic growth and has an overall positive impact on a nation’s economy. Anything above 3% inflation is generally considered bad.

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Essay on Inflation | Inflation Essay for Students and Children in English

Essay on Inflation: A sustained rise in the prices of commodities that leads to a fall in the purchasing power of a nation is called Inflation. Although inflation is a part of the normal economic phenomena of any country, any increase in inflation above a pre-determined level is a cause of concern. The causes of inflation are many. While it is -often cited that a drop in India’s agricultural output lead to the decline in supply, figures tell a different story.

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Long and Short Essays on Inflation for Kids and Students in English

Given below are two essays in English for students and children about the topic of ‘Inflation’ in both long and short form. The first essay is a long essay on Inflation of 400-500 words. This long essay about Inflation is suitable for students of class 7, 8, 9 and 10, and also for competitive exam aspirants. The second essay is a short essay on Inflation of 150-200 words. These are suitable for students and children in class 6 and below.

Long Essay on Inflation 400 Words in English

Below we have given a long essay on Inflation of 500 words is helpful for classes 7, 8, 9 and 10 and Competitive Exam Aspirants. This long essay on the topic is suitable for students of class 7 to class 10, and also for competitive exam aspirants.

India’s food production crossed 235 million tonnes during years 2010-11 as per the latest estimates and this is the highest since Independence. The previous highest production, at nearly 233 million tonnes, was achieved in years 2008-09. Agriculture recorded a 5.4% growth in years 2010-11 compared to the 4% growth achieved all these years, according to S Ayyappan, Director-General of the Indian Council of Agricultural Research.

However, inflation reflects overheating: the supply capacity of the economy is simply unable to match the demands on that capacity. Moreover, purchasing power of consumers is increasing and hence demand is accelerating. Minimum Support Prices (MSPs) for agriculture have also been increasing. The MSPs for various varieties of paddy during the years 2009-10 was between ₹ 950-980 per quintal and during the years 2010-11, it increased to ₹ 1000 to 1030 per quintal.

Moreover, for pulses such as Arhar and Moong the MSPs in years 2009-10 was ₹ 2300 and ₹ 2760 respectively, while in years 2010-11, it increased to ₹ 3000 and 3170 respectively. Another major cause of inflation is the increase in the prices of fuel internationally, which is contributing to the overall price inflation. There has been a steady increase in the international prices, with the Indian crude basket priced at $11 3.09 per barrel, as on May 2011. Any change in price of diesel immediately impacts price of food items, since most of them are dependent on transport through several 100 km. Inflation, in short, is “too much money chasing too few goods”. According to analysts, corruption, mafia operations, greed for money by politicians and industrialists, counterfeiting of currency notes etc., also contribute to corruption as they add to the availability of liquidity in different forms, which in turn adds to inflation.

High level of inflation distorts economic performance. It has added pressure on the Central Bank to raise rates despite signs of slow growth in the Indian economy. Thus, high inflation and rising interest rates are crimping domestic demand and slowing down the economy. Inflation also affects investment as higher long-term inflation adversely affects growth and investment. High inflation is pushing up the cost of credit for firms as well as escalating their input costs by inflating their spending on raw materials and wages. Corporate investment is affected by cost escalation of inputs, and inflation is waning the confidence in the economic growth.

Short Essay on Inflation 150 Words in English

Below we have given a short essay on Inflation is for Classes 1, 2, 3, 4, 5, and 6. This short essay on the topic is suitable for students of class 6 and below.

Food inflation adversely affected the country in 2013 and 2014 consecutively. Curbing the prices of goods is essential in order to attain revival from the slowdown in economic growth. Food bills already consume 35% of household incomes.

Inflation, as pointed, out by economists, occurred due to weak monsoon needed for the cultivation of summer crops. Despite being the second largest producer of fruits and vegetables after China, India suffers from shortages, owing to the lack of efficient cold storage and transport facilities. RBI Governor though, has promised to cut down inflation to 8% by 2015. All measures to curb inflation would be successful only if the middle men in the supply chain are barred from carrying out their nefarious activities. Only can then we not lose out on onions and tomatoes on our dinner plates.

Inflation Essay Word Meanings for Simple Understanding

Output – the material produce or yield, product
Escalating – to increase something in extent
Accelerating – to cause faster or greater activity, development, progress, advancement
Crude – lacking finish, polish, or completeness
Counterfeiting – made in imitation so as to be passed off fraudulently or deceptively as genuine
Distort – to give a false, perverted, or disproportionate meaning to, misrepresent
Crimping – to check, restrain, or inhibit; hinder
Escalation – increase in intensity, magnitude, etc
Waning – decreasing in strength, intensity, etc
Revival – restoration to life, consciousness, vigour strength, etc
Nefarious – extremely wicked or villainous

Introduction

In the 1970s the prices of most things Americans buy more than doubled. Such a general increase in prices is called inflation. Of course prices of selected goods may increase for reasons unrelated to inflation: the price of fresh lettuce may rise because unseasonably heavy rainfall in California has ruined the lettuce crop, or the price of gasoline may rise if the oil-producing countries set a higher price for oil. During inflation, however, all prices tend to rise.

Over the last 400 years there have been many periods of inflation. In the 16th century, when the Spaniards began bringing back gold and silver from the New World, prices in Western Europe moved upward as the supply of money increased. During the 19th century prices tended to go downward as food and raw materials became cheaper. After major wars such as the Napoleonic Wars and World Wars I and II, prices again moved upward. In the 1950s and ’60s a so-called creeping inflation occurred, when the general price level in the United States and Western Europe rose by an average of 1 to 5 percent each year. In the 1970s inflation increased until it reached as much as 13 percent a year in the United States.

Many countries have suffered from inflation more than has the United States. Israel had inflation of more than 100 percent a year in the early 1980s, meaning that the cost of living more than doubled every year. In Argentina inflation was greater than 400 percent in 1975 and averaged more than 100 percent each year from 1976 to 1982. The most remarkable inflation in modern times was the German hyperinflation of 1923, when people went to the store with wheelbarrows full of money to buy a few groceries. A similar hyperinflation occurred in Hungary after World War II.

Inflation has been defined as “too much money chasing too few goods.” As prices rise, wages and salaries also have a tendency to rise. More money in people’s pockets causes prices to rise still higher so that consumers never quite catch up. Inflation can go on continuously year after year so long as the money supply continues to increase.

Continued inflation affects people in diverse ways. Those who live on fixed incomes, or those whose incomes increase very slowly, suffer most from inflation because they are able to buy less and less. Those who lend money when prices are lower may be paid back in dollars of reduced purchasing power. Banks and savings and loan associations generally lose from inflation. People who borrow money, however, may profit by paying their debts in dollars that have shrunk in purchasing power. Inflation thus encourages borrowing and discourages saving. It also leads people to buy real estate and durable goods that will keep their value over time. In the United States this tendency is reinforced by the tax system, which allows taxpayers to deduct property taxes and interest payments from their taxable incomes. If inflation continues for a long time, the country as a whole may begin to consume more and invest less as people find it more profitable to borrow than to save. In other words, inflation causes society to use more of its resources for today’s purposes and to set aside less for tomorrow’s needs.

Causes of Inflation

Inflation has many causes, but they all operate to raise the demand for goods and services beyond the capacity of the ecomomy to satisfy that demand. Often inflation follows a war, when the government has spent vast sums on military equipment and has not raised taxes enough to pay for it. Heavy government spending in peacetime may also lead to inflation. The principal reason why governments create inflation is that they are able to print money. When a government pays its bills by printing money rather than by raising taxes, the effect is to increase the demand for goods and services. If demand is already high, increasing it will only push up the prices of those goods and services.

But the government may not be the only player in the inflation scenario. Citizens, through their voting power, encourage the government to follow inflationary policies. In the United States special interest groups often exert pressure on Congress for programs that will benefit them at the expense of the treasury. Few taxpayers actually ask their Congressional representatives to raise taxes. Government deficits in themselves do not necessarily lead to inflation, but they make it more difficult to prevent inflation or to slow it down.

Another part in the scenario is played by people’s efforts to protect themselves from the effects of inflation. Consumers want their incomes to increase so as to keep up with rising prices. Those who belong to unions may put pressure on employers to raise wages, a factor that tends to force up prices still further. Those who lend money expect to be paid back in inflation-adjusted dollars. Retired people want their social security and other pension payments to increase with the cost of living. As inflation continues, people expect it to become even worse and try to compensate for it in advance. The simple expectation of inflation thus helps to keep it going.

Stagflation

In the 1970s many industrial countries experienced high inflation coupled with rising unemployment. The word stagflation was coined to describe this condition of rising prices and economic stagnation. Stagflation was brought about by a number of factors: (1) The price of oil trebled in 1973 and 1974 and doubled again in 1979 as the Organization of Petroleum Exporting Countries (OPEC) raised its selling prices. This led to steep increases in energy costs for industrial countries. (2) For a number of reasons output per worker grew more slowly in the 1970s than it had before. (3) Industrial countries were faced with a need to adjust their industries to the changing world economy, particularly industries such as shipbuilding, steel, and textiles. Old established industries in some countries were losing their markets to new competitors elsewhere, and their laid-off workers could not always find new jobs. (4) The labor force in the industrial countries grew rapidly during the 1970s; more women entered the job market as well as greater numbers of inexperienced male workers.

All of these factors helped to hold down output and raise prices, but their effects were made worse by the slowness of labor and management to adjust to changing conditions. Governments were also slow to do the unpleasant things that were necessary to combat inflation and make industries more productive. By the beginning of the 1980s, inflation was still at high levels in most countries. In Italy consumer prices rose by 17.8 percent in 1981, in France by 13.3 percent, and in the United Kingdom by 11.9 percent. In Canada the figure was 12.4 percent and in the United States 10.4 percent. Least affected were West Germany and Japan, where prices rose by 5.9 percent and 4.9 percent, respectively.

Cure of Inflation

Perhaps the most painful aspect of inflation is the measures that must be taken to overcome it. Essentially they involve reducing the pressure on prices. One way is to limit the rate at which the supply of money is allowed to increase, as the Federal Reserve authorities did in the United States beginning in 1979. Limiting the supply of money makes it difficult for businesses and consumers to obtain loans; it causes interest rates to rise; and it often creates unemployment. The American recession of 1980 to 1983 was largely the result of the Federal Reserve Board’s tight money policy, which was intended to stop inflation. While inflation fell from above 13 percent in 1980 to less than 5 percent in the first half of 1983, unemployment rose from about 7 percent in 1980 to more than 10 percent in 1983.

Price Controls

Sometimes governments attempt to prevent inflation by making it illegal to raise prices. This works best in wartime when the economy is being organized toward military goals. The United States government used price controls during World War II and supported them by rationing goods that were in short supply. Consumers were given coupons entitling them to buy limited amounts of essential goods in order to make sure that everyone got a fair share. Otherwise lines would have formed outside retail stores and outlets with only those at the head of a line able to purchase what they needed. When controls were discontinued after the war, prices rose rapidly for several years because of the excess purchasing power that had accumulated in consumers’ savings. But inflation in the United States never exceeded 15 percent in any single year—modest compared with that of many other countries. In the early 1970s, when inflation began to exceed 5 percent a year, President Richard M. Nixon established price controls, but the experiment did not work well and was soon discontinued.

Price controls interfere with the free working of the economy. No government regulation can take account of all the complex changes that occur within different industries. Prices of some goods may be falling while those of others are rising; such changes often reflect differences in production costs. The straitjacket of controls prevents the economy from adjusting to such changes in relative costs.

How Inflation Is Measured

Inflation is a general increase in prices, but it is difficult to measure because the prices of different goods change by different amounts. One approach is to deal with a “basket,” or selection of goods that most people buy. If such a basket costs $10.00 in December 1973 and $11.22 a year later, one can say that the rate of inflation is 12.2 percent (1.22 divided by 10). This is the method used in the Consumer Price Index (CPI) compiled by the United States Department of Labor. The CPI rose 12.4 percent in 1980, 8.9 percent in 1981, and 3.9 percent in 1982.

For some people inflation will be greater than for others. For those whose shopping list resembles the CPI market basket, inflation will not be the same as for those who buy a quite different assortment of goods. For example, if food is left out of the market basket, the CPI rose by 4.0 percent in 1982 rather than 3.9 percent. If energy is omitted, the CPI rose by 4.2 percent. If both food and energy are omitted, the CPI rose by 4.5 percent. If food, energy, and the cost of buying a home are left out, the price of the remaining goods in the basket rose by 6.0 percent.

A more complex way to measure price changes is by pricing all the goods and services produced in the national economy and comparing the total change from year to year. This is done by the United States Department of Commerce through its gross national product statistics. The so-called Implicit Price Deflator rose 9.3 percent in 1980, 9.4 percent in 1981, and 6.0 percent in 1982.

Disinflation and Deflation

The process of getting rid of inflation is sometimes called disinflation, which means a slowing down of the rate of inflation. This should not be confused with the term deflation, which is defined as a fall in the general level of prices.

Deflation occurs rarely in modern industrial economies. The last time a heavy decline in prices occurred in the United States was in the Great Depression of the 1930s. Between 1929 and 1933 the Implicit Price Deflator for all goods and services fell by 2.1 percent, while the prices of goods used for personal consumption fell by 3.8 percent.

Deflation also refers to a reduction in incomes rather than prices. The petroleum price increases of the 1970s had both inflationary and deflationary effects: in the United States, for example, they raised the general price level while at the same time reducing incomes. Much of the former purchasing power of Americans was diverted to petroleum-exporting countries, especially those in the Middle East. ( See also business cycle .)

Francis S. Pierce

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Free Online inflation flashcards for Class 7

Explore our comprehensive collection of Grade 7 Inflation Flashcards. Perfect for mastering key concepts in Economics. Boost learning with Quizizz!

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Explore Free inflation flashcards for Class 7

Inflation flashcards are a new and exciting learning tool specifically designed for 7th-grade students. These flashcards cover key concepts and terms related to inflation, making complex economic principles easy to understand. With vibrant visuals and concise definitions, these flashcards make learning about inflation both fun and engaging. They are perfect for students who are visual learners and prefer interactive study methods. The flashcards are also a great resource for teachers who want to introduce or reinforce the topic of inflation in their classrooms. Quizizz is a trusted educational platform loved by teachers worldwide for its ease of use, versatility, and engaging features. It offers a wide array of game modes and question types that teachers can use for unit reviews, test preparation, and independent practice. The Quizizz library is an extensive resource of tailored quizzes, with AI features that aid in monitoring individual student progress. This free tool, lauded for its navigable resources and report features, is often reported as a favorite among educators. It's more than just an educational tool, it's a fun and interactive way to learn.

Essay on inflation/Rising prices in Pakistan with quotations

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Inflation essay for 2nd year, class 12 PDF download

Inflation is taxation without legislation - Milton Friedman

Inflation is the crabgrass in your savings - Robert Orben

Inflation is the parent of unemployment and the unseen robber of those who have saved - Margret Thatcher

Production is the only answer to inflation - Anonymous

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Punjabi essay on “inflation”, “ਮਹਿੰਗਾਈ” punjabi essay, paragraph, speech for class 7, 8, 9, 10 and 12 students..

ਸੰਕੇਤ ਬਿੰਦੂ – ਮਹਿੰਗਾਈ ਦੀ ਪ੍ਰਕਿਰਤੀ – ਮਹਿੰਗਾਈ ਕਾਰਨ: ਹੜਤਾਲ ਅਤੇ ਤਾਲਾਬੰਦੀ – ਕਿਵੇਂ ਰੁਕਣਾ ਹੈ

ਇਨ੍ਹੀਂ ਦਿਨੀਂ ਮਹਿੰਗਾਈ ਆਪਣੇ ਸਿਖਰ ‘ਤੇ ਹੈ। ਰੋਜ਼ਾਨਾ ਵਰਤੋਂ ਵਿਚ ਆਉਣ ਵਾਲੀਆਂ ਚੀਜ਼ਾਂ, ਖ਼ਾਸਕਰ ਖਾਣ ਪੀਣ ਵਾਲੀਆਂ ਚੀਜ਼ਾਂ ਦੀਆਂ ਕੀਮਤਾਂ ਅਸਮਾਨੀ ਹਨ। ਇਸ ਵੱਧ ਰਹੀ ਮਹਿੰਗਾਈ ਨੇ ਆਮ ਲੋਕਾਂ ਦੀ ਜ਼ਿੰਦਗੀ ਨੂੰ ਬਹੁਤ ਦੁਖਦਾਈ ਬਣਾ ਦਿੱਤਾ ਹੈ। ਰੋਟੀ ਖਾਣ ਤੋਂ ਪਹਿਲਾਂ ਵੀ, ਉਨ੍ਹਾਂ ਦੇ ਸਾਹਮਣੇ ਬਹੁਤ ਸਾਰੀਆਂ ਲਾਲਸਾਵਾਂ ਹਨ। ਸਰਕਾਰ ਇਸ ਮਹਿੰਗਾਈ ਦੀ ਰਫਤਾਰ ਨੂੰ ਰੋਕਣ ਵਿਚ ਪੂਰੀ ਤਰ੍ਹਾਂ ਅਸਫਲ ਹੋ ਰਹੀ ਹੈ। ਇਸ ਮਹਿੰਗਾਈ ਦੇ ਬਹੁਤ ਸਾਰੇ ਕਾਰਨ ਹਨ। ਵੱਧ ਰਹੀ ਆਬਾਦੀ, ਹੜਤਾਲ ਅਤੇ ਤਾਲਾਬੰਦੀ ਮੁੱਖ ਕਾਰਨ ਹਨ। ਆਰਥਿਕਤਾ ਦਾ ਪ੍ਰਬੰਧ ਵੀ ਇਸ ਲਈ ਜ਼ਿੰਮੇਵਾਰ ਹੈ। ਬੁਰਜੂਆਜੀ ਸਰਕਾਰ ਤੋਂ ਸੱਠਵਿਆਂ ਦੇ ਦਹਾਕਿਆਂ ਨਾਲ ਆਪਣੀਆਂ ਖਾਮੀਆਂ ਭਰਨ ਵਿਚ ਲੱਗੀ ਹੋਈ ਹੈ। ਇਸ ਪਿੱਛੇ ਭ੍ਰਿਸ਼ਟਾਚਾਰ ਵੀ ਇਕ ਵੱਡਾ ਕਾਰਨ ਹੈ। ਸਵਾਲ ਇਹ ਹੈ ਕਿ ਇਹ ਮਹਿੰਗਾਈ ਕਿਵੇਂ ਰੁਕੀ? ਸਰਕਾਰ ਨੂੰ ਉਤਪਾਦਨ ਅਤੇ ਵੰਡ ਵਧਾਉਣ ਲਈ ਸਹੀ ਉਪਾਅ ਕਰਨੇ ਪੈਣਗੇ। ਕਾਲੇ ਕਾਰੋਬਾਰ ਨੂੰ ਰੋਕਣਾ ਪਏਗਾ। ਸਰਕਾਰੀ ਕਰਬੰਦੀਆਂ ਸਖਤ ਕਰਨੀਆਂ ਪੈਣਗੀਆਂ। ਗਰੀਬਾਂ ਨੂੰ ਸਸਤੇ ਰੇਟ ‘ਤੇ ਖਾਣ ਪੀਣ ਦੀਆਂ ਵਸਤਾਂ ਮੁਹੱਈਆ ਕਰਵਾਉਣੀਆਂ ਪੈਣਗੀਆਂ।

Money blog: Smoke machines deployed in Tesco; big inflation moment forecast

The Money blog brings you personal finance and consumer news, plus all the latest on the economy. Let us know your thoughts on any of the stories we're covering in the comments box below.

Tuesday 18 June 2024 21:05, UK

Big inflation moment forecast
Fury as tickets for rock band halved due to poor sales - after many had already paid hundreds
Smoke machines deployed in Tesco to fight break-ins
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By James Sillars , business reporter

We're entering what could be the most crucial 48 hours of the election campaign for the economy.

There are two closely watched events ahead: the inflation figures for May (released early on Wednesday), followed the next day by the Bank of England's last interest rate decision before polling day.

The latter hinges on the former, in terms of potential excitement.

The consensus view is that the rate of inflation will ease back to the Bank of England's target of 2% for the first time since spring 2021.

That should be enough for the Bank of England to act the following day, you may well think. Job done?

Borrowers across the country are crying out for a rate cut after several false dawns in the fixed-rate mortgage market since we first really started talking about the prospects for rate cuts at the start of the year.

A reduction from 5.25% to 5% by the independent central bank would also be welcome for the Conservatives.

But here's where, from the view of economists and financial markets, the fairy tale for voters and the government hangs in the balance.

Even if the inflation rate hits the Bank of England's target this week, just 9% of the market currently expects the Bank of England to cut on Thursday.

That figure could change if the inflation number comes in lower than expected but the prediction is based on the future path for inflation rather than the present number.

Bank policymakers have repeatedly voiced worries over indicators showing a pick-up in the pace of price increases during the second half of the year.

They are concerned too that wage growth, running stubbornly at 6% annually at the moment, risks stoking demand in the economy and therefore inflation further.

Without these factors falling out of consideration, the majority on the rate-setting committee will likely continue to say it's too early to release the chokehold on inflation.

There is also a school of thought that the Bank would be reluctant to act during an election campaign.

So, these two events ahead are unlikely to rock the boat politically, or light up your finances to the extent the Bank of England has seen enough to fire the starting gun.

There is certainly the chance of a surprise on Thursday but it would take a pretty big shift for that pistol to light up the race for Number 10.

Doctors are calling for the drink-drive limit to be reduced to the equivalent of a small glass of wine or beer.

The limit in England, Wales and Northern Ireland is the highest in Europe at 80mg of alcohol per 100ml of blood. In Scotland it is 50mg.

The British Medical Foundation, the trade union for doctors, has said it will lobby the next government to reduce the limit to 50mg - and 20mg for new and commercial drivers.

Read the full story here ...

Grocery inflation has eased for the 16th month in a row, according to industry data released ahead of the general election.

Kantar Worldpanel - which tracks supermarket till prices, sales and market share - said its measure of grocery inflation slowed to 2.1% in the four weeks to 9 June from 2.4% the previous month.

The UK had the lowest rates of business investment out of all G7 nations for a third year in a row, a new report has claimed.

The economies of the US, Canada, France, Germany, Italy and Japan are all said to have attracted higher levels of funding from the private sector - as a percentage of gross domestic product (GDP) - in 2022.

The Institute for Public Policy Research (IPPR), which carried out the research, said the ranking was important because investment in things like new factories, equipment and innovations helped boost economic activity, wages and household incomes.

Read the full story here ...

House buyers or renters should be familiar with being handed an Energy Performance Certificate (EPC) when surveying a property.

In theory, they offer insight as to how efficient a building is - except consumer champion Which? doesn't think so.

Its experts argue that the certificates are "unreliable" and that the next government urgently needs to reform the system.

It may not seem like the end of the world - but access to grant funding, or green financial products such as loans or mortgages, is often available only to those who meet certain EPC-based criteria.

Additionally, a better EPC can make a big difference for owners, as it allows them to command a higher price if they choose to sell and may make the home more attractive to tenants.

The consumer magazine selected homeowners and booked EPC assessments on their behalf.

"Which? uncovered issues with the accuracy of the results and the recommendations that homeowners received," it said.

"Most participants (eight out of 11) told Which? their EPC did not appear to be accurate - they said the descriptions of key aspects of their home like the windows, roofs and heating systems were incorrect."

An electric vehicle company looking to rival Tesla has filed for bankruptcy amid a wider sales slump in the industry.

Fisker filed a bankruptcy petition in Delaware yesterday after after failing to secure investment, announcing weaker-than-expected earnings and plans to cut 15% of its workforce.

The company, started by James Bond car designer Henrik Fisker, announced plans in March to cut prices by as much as 39%, while its share price has plummeted by 99% in recent days.

This comes as electric vehicle sales in the US and Europe continue to drop.

Smoke machines are the latest gadgets being introduced into supermarket shops to fight crime.

Tesco has deployed them in some stores to stop thieves breaking in after-hours, Sky News understands.

The 4ft security machines - arranged on the shop floor after closing - fill the room with a dense fog if motion detectors are tripped.

"Warning: You're being watched. Smoke screen security fog in operation," reads a message on the front of the device, which is fitted with a CCTV camera.

Sky News understands the unit pictured above was not plugged in and has been removed after being mistakenly left out during opening times.

While the deterrent has been rolled out in some high-risk branches, they are not part of a universal policy.

A customer who saw the device said: "The size and visibility of the machine, along with the prominent camera, and the pair of eyes and 'We're watching you' decals, highlight its use as yet another part of the culture of fear visited on the most vulnerable in our society during this cost of living crisis."

Tesco has declined to comment.

Basically... it's a little "what it says on the tin", but an interest-only mortgage is an agreement where you pay only the interest owed on your loan each month.

Popular in the 1980s and 90s, and peaking just before the 2008 financial crisis, interest-only mortgages benefit those who are trying to keep their monthly payments down in the short term.

How does an interest-only mortgage work?

You only pay off the interest on the amount you borrow - not the loan itself.

This differs from more common repayment mortgages which see you pay off the interest and some of the capital on your home each month, eventually leading to the mortgage being paid off at the end of the term.

With interest-only, you'll have to pay off the total amount borrowed in full at the end of your mortgage term using savings, investments or other assets.

You can also find temporary arrangements if you are struggling financially.

Example: You're looking at a house which requires you to borrow £100,000 over 25 years with a fixed interest rate of 3.5%.

Imagining this interest rate stays the same for the whole term, on a repayment mortgage plan your monthly cost would be £501 , while on interest-only it would be significantly lower at £292 .

The interest-only option is great for those who want to keep their outgoings in check - but it does mean that, as the capital isn't being paid down, the amount of interest ends up being higher than on the full repayment plan.

Therefore someone on an interest-only deal would owe £187,579 (£87,579 interest plus £100,000 loan capital outstanding), while a repayment deal would see them pay back £150,238 (£100,000 loan capital fully paid off plus £50,238 interest).

How easy are they to come by?

As we touched on earlier, prior to the 2008 financial crisis interest-only mortgages were much easier to get hold of - some 40% of all mortgages taken out were interest-only around this time.

But the crash revealed that many loans were at risk with customers who would struggle to pay off the full loan later down the line.

Affordability criteria were introduced as a result, which caused their popularity to sharply decline. It's now quite difficult to borrow on an interest-only basis, with not all lenders offering them as an option.

Those that do will have strict terms, such as a high deposit and an approved plan to pay the loan back at the end of the term.

Research by the Financial Conduct Authority in August last year revealed that the number of interest-only and part-interest-only mortgages had halved since 2015.

What are the benefits?

The biggie with interest-only mortgages is the reduced monthly payments, which can provide you with a financial safety net if you go through times when you're earning less.

There's also a chance that if you're in your property for a long time, you could sell it for more than you paid for it, meaning you've built up equity to help you pay off the lump sump.

What about the downsides?

You're not paying off any of the loan as you go, meaning you're not building up that equity that you would do with a repayment mortgage. You'll also end up paying more interest due to not making a dent in the capital.

Interest-only also means you need a solid plan for paying it off at the end of the term - this may include constant monitoring of investments and being strict with yourself to ensure you're putting money aside. With a repayment plan you don't need to think about this element.

Read other entries in our Basically series...

An invitation-only "Diamond" Deliveroo subscription has launched, offering priority delivery, dedicated customer care teams and access to restaurants unavailable to other consumers.

For £19.99 per month, users get 10% credit back on orders of £30 or more and an on-time promise - meaning if an order arrives more than 15 minutes late, customers get their money back.

Only the very top users of the app will be invited to subscribe - with members estimated to spend three times as much as regular customers and twice as likely to try a restaurant that was new to the platform.

"The enhanced loyalty programme will play an important role in driving growth for Deliveroo," the company said.

A London fish and chip shop has been named in the top 100 best cheap eats in Europe.

The Mayfair Chippy comes in at 87 in the respected Opinionated About Dining list - which is widely shared by top chefs and which draws conclusions based on tens of thousands of reviews from foodies.

As far as chippies go, Mayfair isn't actually that cheap - a cod and chips will set you back over £19...

The top UK entry is bakery Fabrique at 25 - and most things in its central London branches cost less than a fiver.

Pollen Bakery in Manchester, where you can easily eat for less than £10, is at 54 - with St John's Bakery (Neals Yard), in London, famous for its donuts, is at 57.

Jolene bakery in Newington Green, London, which has a daily changing menu, is at 59 - ahead of ramen joint Kanada-Ya, which has branches in Angel, Soho and Covent Garden.

Lots of other London eateries make the lower end of the top 100 - which is topped by Oslo coffee bar Tim Wendelboe.

What's your favourite cheap eat across the UK? Tell us in the comments box and we may follow this up later

By Daniel Binns, business reporter

The stock market in London has crept up slightly this morning as investors wait for tomorrow's inflation data - followed by Thursday's interest rate decision by the Bank of England.

The figures will be the last major economic indicators to be released ahead of July's general election.

Commentators expect inflation to fall to the Bank's target of 2% on Wednesday, according to a poll of economists by Reuters.

While an interest rate cut is not expected this week, the forecast drop in inflation will help pave the way for a rate cut in August, experts say.

Fiona Cincotta, a senior market analyst at City Index, said investors were keenly waiting for tomorrow's data - but said there was a "sense of optimism".

Overall, the FTSE 100 is up almost 0.4% this morning, while the FTSE 250 has increased by just over 0.5%.

Among the top gainers is Whitbread, which owns brands such as Premier Inn. The hospitality firm is up nearly 4% after reporting its results for the first quarter.

Whitbread said sales rose 1% to £739m and that its performance was in line with expectations.

At the other end of the scale, industrial equipment rental company Ashtead Group has slipped nearly 4% after the firm downgraded its growth forecast.

On the currency markets, £1 buys $1.27 US or €1.18, similar to Monday.

The cost of oil is up this morning, with a barrel of Brent Crude priced at almost $84 (£66).

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'Lack of trust' between ADF and Queensland police plagued Taipan helicopter crash investigation, inquiry hears

An army chaplain, tasked with consoling the families of four defence personnel who died in the Taipan helicopter crash off Queensland's coast last year, has denied telling a partner she would "find somebody new".

Captain Danniel Lyon, Lieutenant Maxwell Nugent, Warrant Officer Class Two Joseph Laycock, and Corporal Alexander Naggs died when their helicopter crashed into the ocean off Lindeman Island in July 2023 during a training exercise.

A ship pulls Taipan wreckage from the ocean, authorities are in a smaller watercraft nearby

An independent inquiry examining the circumstances that led to the ill-fated crash has started its third phase of public hearings in Brisbane.

In the months after the crash, Chaplain Bruce Hammonds — who served as a reservist with the 6th Aviation Regiment — was accused of telling the partner of Lieutenant Nugent, Chadine Whyte, she was "young" and would "find somebody new".

"Which is an incredibly cruel thing to say because [my partner is] not replaceable," Ms Whyte told the inquiry in May.

Chaplain Hammonds denied the accusation during questioning by Colonel Jens Streit, who is assisting former judge Margaret McMurdo in the inquiry, but admitted his recollection of that day was not accurate.

"I would never have used those words," he said.

"She'd suffered significant loss. I certainly was not dismissive of her or minimised the pain or grief she was feeling."

Maxwell Nugent in an defence force uniform in front of a plane, his arms crossed and smiling

In a separate incident, Chaplain Hammonds was accused of telling the widow of Captain Danniel Lyon, Caitland Lyon, that hosting his funeral on Father's Day would be "disrespectful" to her own father and future partners.

"I wanted to encourage her not to have it on that date, because of the implications of Father's Day … not just for her family but for the whole regiment," he said.

"I didn't suggest she would find somebody, but that life would move forward.

"I didn't use the words disrespect, I wanted her to honour [her own father]."

A woman speaks into a microphone at an inquiry.

The inquiry was told, since joining the army in late 2010, Chaplain Hammonds underwent minimal formal training in the process of notifying bereaved families.

'Lack of trust' between QPS and ADF

The inquiry also heard trust and communication issues plagued the relationship between the Australian Defence Force (ADF) and Queensland Police Service (QPS) during the initial investigation and recovery.

"It was like daily head-banging against the wall," Senior Constable Christian Troeger, a Forensic Crash Investigator involved in the recovery mission, told the inquiry.

"The lack of information sharing … it's very easy to believe there was a lack of trust across all gambits of the investigation."

Previous inquiry sittings heard witnesses raised concerns about the integrity of QPS's handling of the investigation.

Despite only undergoing a "very basic" training course on air crash investigations, Senior Constable Troeger was sent to the Whitsundays to assist in the recovery operation on July 31, 2023, four days after the incident.

He told the inquiry the ADF was dismissive of police expertise, and that he believed the defence force was not sharing crucial evidence.

"We had concerns that once the technical information from the flight recorder had been surrendered to the ADF, that information would not have been received by us," Senior Constable Troeger said.

"When debris was obtained, everything had to be cleansed and sanitised."

Experts, members of the QPS, and members of the 6th Aviation Regiment are due to give evidence this week.

The inquiry continues.

X (formerly Twitter)

Independent inquiry launched into fatal Taipan army helicopter crash

Father of soldier killed in Taipan helicopter crash tells inquiry son had safety concerns

Defence Industry
Whitsundays

COMMENTS

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Money blog: Smoke machines deployed in Tesco; big inflation moment
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Essay on Inflation in India

100 Words Essay on Inflation in India

Inflation in India

Controlling Inflation

250 Words Essay on Inflation in India

Impacts of Inflation

Managing Inflation in India

500 Words Essay on Inflation in India

Causes of Inflation in India

Impact of Inflation

Measures to Control Inflation

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Essays on Inflation

Essay Title 2: Inflation and Its Impact on Consumer Purchasing Power: A Closer Look at the Cost of Living

Essay Title 3: Hyperinflation and Economic Crises: Case Studies and Lessons from History

Report on Inflation and Its Causes

Iflation and Its Causes

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The Issue of Unemployment and Inflation in Colombia

Lesson of the Day: ‘Inflation Has Arrived. Here’s What You Need to Know.’

Lesson Overview

Types of Inflation

Demand-Pull Inflation

Cost-Push Inflation

Built-in Inflation

Remedies to Inflation

Measurement of Inflation

Effect of Inflation on the Economy

Important Terms related to Inflation

FAQ about Inflation

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Essay on Inflation

The Causes of Inflation

The Effects of Inflation

Economic Effects

Social Effects

Managing Inflation

Monetary Policy

Fiscal Policy

Supply-Side Policies

Economic essays on inflation

Essay on Inflation: Meaning, Measurement and Causes

Meaning of Inflation:

Measurement of Rate of Inflation:

What Causes Inflation?

2. Monetarist View:

Essay on Inflation

Inflation and Unemployment

History of Inflation

Factors causing Inflation

Effects of Inflation

Mitigation Strategies

Inflation situations

Currency Depreciation

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