Inflation

The types of inflation discussed in the text are demand-pull inflation and cost-push inflation.

According to Pigou, inflation takes place when money income is expanding relatively to the output of work done by the productive agents for which it is the payment.

The objectives of studying this unit on inflation include explaining the meaning and definition of inflation, outlining the concept of inflationary gap, describing the demand-pull and cost-push inflation, comprehending the effects of inflation, and suggesting how inflation can be controlled.

<p>Modern economies concentrate on the study of specific causes of price rise in order to promote price stability and address the problem of inflation more severely.</p> Signup and view all the answers

<p>Both underdeveloped and developed countries have faced the problem of persistent price rise, leading to a concentration on the study of specific causes of price rise and the design of policies to promote price stability.</p> Signup and view all the answers