In this article we will discuss about:- 1. Meaning and Explanation of Inflationary Gap 2. Elimination of Inflationary Gap 3. Inflationary Gap and Inflation Rate 4. Significance 5. Limitations 6. Inflationary and Deflationary Gaps 7. Examples. Meaning and Explanation of Inflationary Gap: Keynes, in his pamphlet entitled How to pay for the War, 1940 explained inflation in terms of inflationary [...]
Essay on Deflation: Causes, Effects and Control! Essay on the Meaning and Causes of Deflation: Deflation is the opposite of inflation. Just as inflation is a phenomenon of rising prices, deflation is a phenomenon of falling prices. In the words of Crowther, "Deflation is that state of the economy where the value of money is rising or the prices are [...]
Which of the two is better- inflation or deflation? Inflation is a phenomenon of rising prices without causing change in the levels of employment and output. Deflation, on the other hand, is a phenomenon of falling prices accompanied by a fall in the levels of employment and output. Both inflation and deflation are harmful for society and have undesirable economic [...]