Black Money is a cause of Inflation" Explain.
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Make note on the folowings signs
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10 Distinguish between:
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Answers
Explanation:
Inflation is basically a rise in prices.
A more exact definition of inflation is a situation of 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 main causes of demand-pull inflation are:
1. Growth in Black Money—Growth in unaccounted money leads to more demand for goods.
2. Increase in Population—Increase in population raises the number of consumers in the market.
This, in turn, raises demand for goods.
3. Increase in Money Supply—Increase in money supply by the RBI raises the money in circulation, which in turn raises demand for goods.
4. Increase in Disposable Income of the Consumer—When the common man has more money at his disposal, he will demand more goods.
Answer:
Demand-Pull Inflation, Cost-push inflation, Supply-side inflation Open Inflation, Repressed Inflation, Hyper-Inflation, are the different types of inflation. Increase in public spending, hoarding, tax reductions, price rise in international markets are the causes of inflation. These factors lead to rising prices. Also, increasing demands causes higher prices which leads to Inflation. In this article, we will discuss the meaning of inflation and what causes it.
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