8/19/2019 Group Membersather Abdul Jabbar e10

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1. Group MembersATHER ABDUL JABBAR E10-013QAZI MUHAMMAD UBAID E10-078

2.2. Inflation Impact onEconomy of Pakistan

3.3. What is Inflation…?An increase in the amount of currency incirculation, resulting in a

relatively sharp andsudden fall in its value and rise in prices.

4.4. Types of Inflation¬ Demand Pull Inflation¬ Cost-push inflation¬ Pricing Power Inflation¬ 

Sectorial inflation¬ Built-in inflation

5.5. Causes of Inflation¬ Excess money printing¬ High Production Cost¬ International lending

and national debts¬ Federal taxes

6.6. Effects of Inflation¬ Negative Effects¬ Positive Effects

7.7. Negative Effectsυ It is difficult for consumers to purchases more goods.υ It generates very

bad effects on the poor labour force.υ Inflation reduces the living standard and

purchasingpower of people.υ Causes an increase in tax bracket

8.8. Positive Effectsυ There is more investment in country at the time ofinflation.υ Inflation

increases the economic activities that may causeto inventions and innovations.υ Profit of the

producers also increases when there isnormal inflation.υ It can benefit the cartels.

9.9. How to survive Inflation..????υ Be wise when holding cash.υ Be careful when buying

bonds.υ Invest in things that youre going to use anyway and willserve you for a long time.υ 

Learn about bartering.υ Ask yourself, do I really need these things I’m spending mymoney

on?

10.10. Inflation Impact on Economy of Pakistanυ Rise in price of oil and gas.υ Secondary

measures from government.υ Standard of living.υ Erosion of quality.

11.11. Rise in prices of oil and gasIn Pakistan, the most important thing is the rise in prices ofoil,

gas, excise duties and the increase in the utility tariffs.These all has an inflationary impact on

the economy.

12.12. Secondary measures fromgovernmentυ Government claims that in order to keep the

prices ofessential commodities under control, it has been takingvarious measures throughoutthe year.υ Unfortunately, in Pakistan, these core problems havenever undergone such a

planning process.

13.13. Standard of livingυ Inflation always hurts ones standard of living.υ People have to pay

more for the same goods and services.

14.14. Erosion of qualityIn a competitive environment, where demand and supplyforces

predominantly influence price movements, anyattempts to keep the prices down artificially

results in adilution of quality and in some cases quantity (whicheffectively means no real

change in price).

15.15. Example………!Take the example of rugs produced in Gakkhar Mandi. Thetown used to

produce very high quality rugs, which were notonly used throughout the country but werealso exported.The producers found out that the demand for rugs was highlyprice elastic.

16.16. Inflationary factors in Pakistanυ Supply side shocks.υ Rising trade deficit.υ Rising import

prices.υ Indirect taxes.

17.17. Supply side shocksSupply side shocks can cause large fluctuations in food andoil prices,

effects of which on overall inflation, at times, canbe so excessive that these cannot be

countered throughdemand management, including monetary policy.

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8/19/2019 Group Membersather Abdul Jabbar e10

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