• INFLATION AND DEFLATION
    ECONOMICS

    INFLATION AND DEFLATION

    Inflation may be defined as a persistent rise in the general price level of goods and services. Inflation occurs when the volume of purchases is permanently running ahead of production, with too much money in circulation chasing too few goods.   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 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…

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