introduction• .INFLATION“ Inflation is nothing more than a sharp upward

rise in price level.” Too much money chasing, too few goods.” Inflation is a state in which the value of money is falling i.e. price are rising.

• 3. KINDS OF INFLATION On the basis of rate of inflation On the basis of degree of control On the basis of causes Others.

• CAUSES OF INFLATION Demand pull inflation Cost push inflation.

• HOW TO CONTROL INFLATION Monetary Measures Fiscal Measures Other Measures.

MARKETING PLAN

• About IdeaLeading mobile operator in IndiaAdityaBirla group is the sole promoter3rd Largest GSM company in IndiaCovernearly 70 % of India’stelephonypotential

• SEGMENTATIONTARGET MARKETPOSITIONING• SegmentationGeographicRegions and cities -Idea GSM

services are licensed in 13 circles of India and used in metro cities & small villages DemographicAge, Family size, Income, Occupation, Education

• Target MarketAny one from 16 to 60 years old from rural,urban & semi-urban area.60% target market is from rural area.

Inflation and unemployment

Inflation and unemployment Inflation & Phillips curve: The inflation rate is the percentage change

in the price level. The Phillips Curve shows the relationship between the inflation rate and the unemployment rate.

Causes of Inflation: Demand-pull inflation is inflation initiated by an increase in aggregate demand. Cost-push, or supply-side, inflation is inflation caused by an increase in costs

Stagflation: Stagflation occurs when output is falling at the same time that prices are rising. One possible cause of stagflation is an increase in costs.

7% becomes the natural rate in this case. Whenever unemployment rate is pushed below natural rate , wages increase, pushing up costs. This leads to a lower level of output which pushes unemployment back to the natural rate

CYCLICAL UNEMPLOYMENT this type of unemployment may be widespread across a range of industries and sectors Keynes

HOW TO CONTROL INFLATION Monetary Measures Fiscal Measures Other Measures

MonetaryMeasures• Credit Control• Demonetization of

Currency

FISCAL MEASURES• Reduction in Unnecessary Expenditure• Increase in Taxes• Increase in Savings• Surplus Budgets• Public Debt • To Increase Production • Rational Wage Policy• Price Control • Consumer Price Index• WholesalePriceIndex

OTHER MEASURES• To Increase Production• Rational Wage Policy• Price Control

HOW IS IT MEASURED? Consumer Price Index Wholesale Price Index

Consumer Price Index• CPI is a measure estimating the average price of

consumer goods and services purchased by households.

• CPI measures a price change for a constant market basket of goods and services from one period to the next with in the same area(city, region, ornation)

• It is a price index determined by measuring the price of a standard group of goods meant to represent the typical market basket of a typical urban consumer. The percent change in the CPI is a measure estimating inflation.

WHOLESALE PRICE INDEX• WPI was published in1902, and was one of the

economic indicators available to policy makers until it was replaced by most developed countries by the CPI market Index in the1970.

• WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market.

• Some countries (like India and ThePhilippines) use WPI changes as a central measure of inflation. However, India and the United States now report a producer price index instead.

EFFECTS OF INFLATION

They add in efficiencies in the market, and make it difficult for companies to budget or plan long-term.

Uncertainty about the future purchasing power of money discourages investment and saving

There can also be negative impacts to trade from an increased in stability incurrency exchange prices caused by unpredictable inflation.

Higher income tax rates. Inflation rate in the economy is higher

than rates in other countries; this will increase imports and reduce exports, leading to a deficit in thE

EXAMPLESIncrease in the price of wheatIncrease in the price of world oilIncrease in the price of riceIncrease in the price of CNG

STAGFLATION A condition of slow economic growth

and relatively high unemployment accompanied by inflation.

This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries.

PHILLIPS CURVEIn1958,a New Zealand economist, A.W.H. Phillips proposed that there was a trade-off between inflation and unemployment.The lower the unemployment rate, the higher was the rate of inflation.Governments simply had to choose the right balance between the two evils.Economies did seem to work like this in the 1950s and 1960s, but then the relationship broke down.

The Phillips curve

o 1958 – Professor A.W.Phillipso Expressed a statistical relationship between the

rate of growth of money wages and unemployment from 1861–1957.

o Rate of growth of money wages linked to inflationary pressure

o Led to a theory expressing a trade – off between inflation and unemployment

THE PHILLIPS CURVE

The Phillips Curve shows an inverse relationship between inflation and unemployment. It suggested that If governments wanted to reduce unemployment it had to accept higher inflation as a trade-offMoney illusion–wage rates rising but individuals not factoring in inflation on real Wage rate

Wage growth %(inflation)

2.5%

1.5%

Problems:1970s – Inflation and unemployment rising at the same time – stagflation Phillips Curve redundant?Or was it moving?

The phillips curve

Where the long run Phillips Curve cuts the horizontal axis would be the rate of unemployment at which inflation was constant – the so – called Non –Accelerating Inflation Rate of Unemployment (NAIRU)

To reduced unemployment To below the natural rate would necessitate 1 Influencing expectations–persuading Individuals that inflation was going to fall 2 Boosting the supply side of the economy-increase capacity(pushing the PC curve out wards)

The phillips curve

END THANK YOU