Question

Distinguish between creeping inflation and running inflation.

Answer 1

Creeping inflation is inflation where the price level increases at a very slow rate of 2 percent to 2.5 percent per annum.

Running inflation is inflation where the general price level increases a bit faster and the rate of growth of the price level is about 10% per annum.

Answer 2

	Creeping inflation		Running inflation
(i)	When the rise in prices is very slow like that of a snail or creeper, it is called creeping inflation	(i)	When prices rise rapidly at a rate or speed of around 10 per cent to 20 per cent per annum, it is called running inflation.
(ii)	Such an inflation is not detrimental to the economy.	(ii)	Such an inflation has an adverse affect on middle and poor classes.