Which of the following types of inflation acts as an incentive for the industry and other sectors of the economy?
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Running Inflation
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Creeping Inflation
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Structural Inflation
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Stagflation
Running Inflation - When the prices rise rapidly like the running of a horse at a rate of speed 10 to 20% per annum. The rate of the increase of price level gets further accelerated under running inflation. The price level under this type of inflation rises approximately by 10% every year. If government fails to curb running inflation in time, it may easily develop into galloping inflation. Creeping Inflation - Circumstance where the inflation of a nation increases gradually, but continually, over time. Although the increase is relatively small in the short-term as it continues over time, the effect will become greater and greater. It acts as an incentive for the industry and other sectors of the economy. Structural Inflation - Inflation built into the economic system due to its government's monetary policy. In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation or reduce unemployment may actually worsen economic growth.