
296 | Chapter 10
QUESTIONS
1. How is ‘inflation’ defined? Can any rise in price
be considered as inflation? What is the acceptable
or desirable limit of inflation?
2. What are the methods of measuring inflation?
Why is national income deflator considered as a
more reliable method of measuring inflation?
3. Explain the various kinds of inflation. How do
they differ from one another?
4. What are the effects of inflation on wage earners,
fixed income people, debtors and creditors,
producers, and the government? Give the reasons
for the effects of inflation.
5. In what way does inflation contribute to economic
growth? What kind of inflation af ...