Key Points
Key Points: Inflation
- Inflation means a persistent and significant rise in the general price level in an economy.
- It is not a one-time rise in prices; prices must rise continuously over time.
- Inflation is measured by the inflation rate, i.e. percentage increase in average prices.
- Two main types:
Demand-pull inflation – caused by excess demand over supply.
Cost-push inflation – caused by rise in production costs (wages, oil, profits).
