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  1. 1. How is it possible Its quality is as same as previous customer Inflation is a rise in the general level of prices of goods and services in an economy over a period of time
  2. 2. Is it positive or negative ? Causes of inflation Are there affected on economy ? How it calculated? Is it Need in economy?
  3. 3. How inflation calculated Method of calculation Wholesale Price Index (WPI) Consumer Price Index (CPI) Formula: price at end of year price at beginning of yearX 100 WPI of beginning of year Current price Previous price Previous price
  4. 4. Wholesale Price Index (WPI) WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market . Formula: WPI at end of year - WPI at beginning of yearX 100 WPI of beginning of year
  5. 5. Consumer Price Index (CPI) CPI is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers.
  6. 6. Causes of inflation Expansion of Money Supply Increase in Disposable Income Increase in Indirect Taxes Drop in exchange Rate
  7. 7. Rising Population Natural Calamities Speculation and Black Money Unfair Practices by Monopoly Houses Bottlenecks and Shortages Non-monetary Factors
  8. 8. Effects of Inflation Benefit the cartels formed by the companies Benefit borrowers Farmers Gain In Inflation Positive Effect Lowers national saving Rising prices of imports Income diffusion effect Illusions of making profits Negative Effect
  9. 9. Need of inflation At the time it not caught we will try. It help to growth.
  10. 10. Affect on Economy Bank rate policy Statutory Liquidity Ratio Open market operation * Repo rate Reverse repo rate * Cash Reserve Ratio 1.MonetaryMeasures Taxation Government expenditure Public borrowings Protectionist measures 2.FiscalMeasures To Increase Production Price Control 3.OtherMeasures