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Why inflation occurs (Measures to check inflation (Cost side measures…
Why inflation occurs
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Pre - 1970s
Demand pull inflation
Either the demand increases over the same level of supply or the supply decreases with the same level of demand
Keynesian school suggests cuts i'm spending as the way of tackling excess demand mainly by increasing Taxes and reducing got expenditure
Cost push inflation
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Checking such inflation by the way of prices control and income, reducing monopoly, reducing excise and custom duties on raw materials, wage revision etc
Post - 1970s
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Cost push inflation
Every cost push inflation is a result of excessive creation of money-increasing money flow or money supply
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