Types of inflation

  • Cost-push inflation – when a rise in prices is caused by a rise in the cost of production, such as higher oil prices
  • Demand-pull inflation – when a rise in prices is caused by rising aggregate demand and firms pushing up prices due to the shortage of goods
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MORE IDEAS FROM THE ARTICLE

  • Inflation is a situation of rising prices in the economy.
  • Inflation is a sustained increase in the general price level in an economy. Inflation means an increase in the cost of living as the price of goods and services rise.
  • The rate of inflation measures the annual percentage change in the general price level.
  • Inflation leads to a decline in the value of money. “Inflation means that your money won’t buy as much today as you could yesterday.”
  • If the prices of goods rise. the same amount of money will purchase a smaller quantity of goods.

Hyperinflation is generally considered to occur when inflation is greater than 1000%. 

With hyperinflation, money loses its value so rapidly that nobody wants to use it as a medium of exchange.

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RELATED IDEAS

What is PPP ?

PPP is an economic theory that compares different countries' currencies through a "basket of goods" approach.

According to this concept, two currencies are in equilibrium or considered being at par—when a basket of goods is priced the same in both countries, taking into account the exchange rates.

Decline Explained

Currently, we observe decline all around us, whether it's the stock market, travel, or jobs.


There are three different Types Of Decline: Narrative, Physical and Technical/Legal.


Narrative Decline is when the capabilities remain the same but a narrative shift happens in the things we believe in and subscribe to. Narrative shifts determine whether we neglect, utilize or leverage our assets. Example: The stock market.

Many companies use the insights of financial managers and external consultants to manage their risk. A one-size-fits-all solution is not yet in existence when it comes to risk management.

These companies usually use derivatives like forwards, options, swaps and futures to offset their risk, but without a clear set of risk-management goals, the use of derivatives can increase the risk substantially.

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