What is Inflation - Meaning, Working, Calculation, & How to Overcome

What Is Inflation?

What Are the Ways to Calculate the Inflation Rate?

What Are The Different Types of Inflation?

Why Does Inflation Occur?

How to Overcome Inflation?

FAQs About Inflation

How does the government tackle inflation?

Governments control inflation by controlling the overall supply of money through monetary policies. It changes bank rates along with the Current Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) etc., as necessary. It also controls this money supply through open market operations like selling/buying treasury securities.

What are ideal investment instruments during inflation within an economy?

The most common investment instruments to hedge against inflation are gold, real estate, index funds, etc. However, you can also consider investing your money in agricultural commodities like wheat, soybeans, etc., or precious metals like silver, palladium and platinum.

What is stagflation?

Stagflation is an economic situation in which demands plummet, but inflation and unemployment rates continue to increase. It becomes difficult for the government and its policymakers to revive the country's economy from such conditions.

What is the impact of inflation on an existing borrower?

Inflation decreases the relative value of a currency. As a result, borrowers pay an amount worth less than what it would be without the impact of inflation. This is how inflation benefits borrowers in an economy more than lenders.