Economics SSS 2 Third Term

WEEK 10

Money: Inflation and Deflation

Performance Objectives

Student should be able to:

1. Define inflation.
2. Identify the types of inflation.
3. Identify the causes of inflation.
4. Explain ways of controlling inflation.
5. Identify the effects of inflation.
6. Define deflation.

Content

Definition of inflation

Inflation may be defined as a persistent rise in the general price level of goods and services. Inflation occurs when the volume of purchases is permanently running ahead of production with too much money in circulation chasing too few goods.

Types of inflation

1. Demand-pull inflation: This occurs when consumers have high purchasing power, leading to an increase in aggregate demand without a corresponding increase in supply. The factors responsible for.... View More