CHAPTER 13

Inflation

CHAPTER OUTLINE

MEANING AND DEFINITION OF INFLATION

“Inflation” is commonly understood as a situation of substantial and rapid general increase in the level of prices and consequent deterioration in the value of money over a period of time. The behaviour of general prices is measured through price indices. The trend of price indices reveals the course of inflation or deflation in the economy. As Lerner says, “a price rise which is unforeseen and uncorrected is ...

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