Question

Differentiate between creeping and running inflation.

Give one point of difference between creeping and running inflation.

Answer 1

1. Creeping inflation is inflation where the price level increases at a very slow rate of 2 to 2.5% per annum.
2. Running inflation is inflation where the price level increases a bit faster and is at the rate of 10% per month.

Answer 2

Following is the main difference between creeping and running inflation:

1. Creeping inflation, also known as 'mild inflation' generally consists of 2-3 percent annual rise in prices and is generally known as conducive to economic progress and growth.
2. Running inflation consists of a sustained rise in prices over 8 percent to 20 percent per annum. Running inflation is a warning signal indicating the need for controlling it. It affects the poor and middle-class people adversely.