Inflation. Inflation in different economic systems. Causes of inflation

TABLE OF CONTENT
Definition
Inflation in different economic systems
Causes of inflation
Types of inflation

DEFINITION
Inflation - a rise in the general price level of goods and services. Gradually, for the same money you can buy fewer goods and services. It’s means that the purchasing power of money has declined, the money worthless - lost part of their real value.
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INFLATION IN DIFFERENT ECONOMIC SYSTEMS
MARKET ECONOMY
ADMINISTRATIVE-COMMAND ECONOMY
in the form of depressed:
the prices are not rising, but there is a trade deficit.
inflation is shown in an open form:
price increases

CAUSES OF INFLATION
• Growth in public spending - money issue.
• Mass unsecured lending currency.
• The monopoly of large companies to determine their own prices and costs of production, especially in the primary industries.
• The monopoly of trade unions, which limits the ability of the market mechanism to determine the acceptable level of the economy wages.
• Reduction of the real volume of national production.
• An increase in state taxes at a stable level of money supply.

TYPES OF INFLATION
Creeping (moderate) inflation
Galloping inflation
Hyperinflation

METHODS OF MEASURING INFLATION
Producer Price Index
Cost-of-living Index
The index of prices of assets
GDP Deflator