Inflation

Types of Inflation Cost-push inflation: higher production cost increase price, usually result of supply shock Increasing costs force producers increase prices. Demand-pull inflation: too many dollars chase too few goods. Demand pulls up ptices, therefore shortage created and overheated economy with excessive spending and same amount of goods. Political panics: depression, recession.

Rate of Inflation

CPI2-CPI1      x100
    CPI1        



Help

1. Debtors
2. Business were the price of the product increases faster than the price of the resources

Hurt

1. Lenders
2. People with fixed income.
3. Savers
4. Fixed Wage