Question

explain types of inflation and its theories​

Answer 1

Answer:

Answer

Inflation is when the prices of goods and services increase. There are four main types of inflation, categorized by their speed. They are creeping, walking, galloping and hyperinflation. ... Some experts say demand-pull and cost-push inflation are two more types, but they are causes of inflation.

Answer 2

Answer:

Inflation is when the prices of goods and services increase. There are four main types of inflation, categorized by their speed. They are creeping, walking, galloping and hyperinflation. Some experts say demand-pull and cost-push inflation are two more types, but they are causes of inflation.

Explanation:

The main two types of inflation are

Demand-pull inflation – this occurs when the economy grows quickly and starts to ‘overheat’ – Aggregate demand (AD) will be increasing faster than aggregate supply (LRAS).

Cost-push inflation – this occurs when there is a rise in the price of raw materials, higher taxes, e.t.c

We can also categorise inflation by how fast the price increases are, such as:

Disinflation – a falling rate of inflation

Creeping inflation – low, but consistently creeping up.

Walking/moderate inflation – (2-10%)

Running inflation (10-20%)

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