1. Types of Inflation on Coverage
Types of inflation on the basis of coverage and scope point of view:-
1. Comprehensive Inflation: When the prices of all commodities rise throughout the economy it is known as Comprehensive Inflation. Another name for comprehensive inflation is Economy Wide Inflation.
2. Sporadic Inflation: When prices of only few commodities in few regions (areas) rise, it is known as Sporadic Inflation. It is sectional in nature. For example, rise in food prices due to bad monsoon (winds bringing seasonal rains in India).
2. Types of Inflation on Time of Occurrence
Types of inflation on the basis of time (period) of occurrence:-
1. War-Time Inflation: Inflation that takes place during the period of a war-like situation is known as War-Time inflation. During a war, scare productive resources are all diverted and prioritized to produce military goods and equipments. This overall result in very limited supply or extreme shortage (low availability) of resources (raw materials) to produce essential commodities. Production and supply of basic goods slow down and can no longer meet the soaring demand from people. Consequently, prices of essential goods keep on rising in the market resulting in War-Time Inflation.
2. Post-War Inflation: Inflation that takes place soon after a war is known as Post-War Inflation. After the war, government controls are relaxed, resulting in a faster hike in prices than what experienced during the war.
3. Peace-Time Inflation: When prices rise during a normal period of peace, it is known as Peace-Time Inflation. It is due to huge government expenditure or spending on capital projects of a long gestation (development) period.
3. Types of Inflation on Government Reaction
Types of inflation on basis of Government's reaction or its degree of control:-
1. Open Inflation: When government does not attempt to restrict inflation, it is known as Open Inflation. In a free market...