is these totals inflation, deflation, disinflation or hyperinflation
|
1992 |
140.3 |
|
|
|
1993 |
144.5 |
144.5 -140.3=4.2/140.3=0.029 *100 =2.9% |
|
|
1994 |
148.2 |
148.2 -144.5=3.7/144.5=0.025*100 = 2.5% |
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Inflation is the rise in the general price-level of goods and services in an economy over a period of time. Inflation is measured using the price indices constructed utilizing the prices of selected goods and services. The two generally used price indices to measure inflation in an economy are Consumer Price Index(CPI) and Whole Sale Price Index(WPI). The inflation rate for a specific year is calculated by finding the percentage change in the price index.
Deflation is just the opposite of inflation. It is the drop in the general price level of goods and services. During deflation we observe a negative inflation rate. This is generally caused by an overall drop in the money supply, consumer spending, government spending and investment spending.
Disinflation is the reduction in the inflation rate over the period. For example a reduction in the inflation rate from 8% in one year to 5% in the next year is called disinflation. It simply indicates a slow in the growth rate of inflation.
Hyper inflation is the extreme case of the inflation rate. An increase in the inflation rate over 50% per month is usually considered as hyper inflation.
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