(Hindi) Crash Course on Quantitative Aptitude: Railway Examinations

B. Inflation. Inflation plays an important role in economic growth. A moderate inflation is desirable in growth. It increase moderate money supply,increase income level and prices of commodities. As the prices rises buyers tend to purchase only those products which constitute important part of their daily life. If prices will go down as happens in deflation it will discourge producer to produce in required quantity. Similarly if price goes up as happens in hyper inflation it will erode the purchasing power making currency merely a piece of paper and only small proportion of consumers will have access to commodities. stagflation on other hand halts growth. it results in higher inflation where producers are not able to get adequate men and material required for production. this situation also contribute to rise in unemployment and thus not good for economy.

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