Inflation – Types and Causes

Increase in average earning results in increase in demand of product and services, which leads to increase in price level.

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Political Condition

Political instability cause the unstable economic condition leads to production cycle disturbed and Inflation rate goes high.

Prices
When business houses decide to increase their profit margins the prices also raises in result, normally it is activity of upward phase of business cycle.

Balance of Payment and Balance of Trade

International trade has an effect on the countries policies; change in foreign currency rates make changes the balance of payments and push inflation rate higher.