ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Hyperinflation: When prices rise beyond 100% per annum or even more, it is called hyperinflation. Such a situation brings a total collapse of the monetary system because of the continuous fall in the purchasing power of money.

Detailed explanation-2: -When inflation is more than 10%, then it is known as galloping inflation. When the rise in prices is 3% to 10% in a year, then it is known as walking inflation. When the rise in prices is 3% or less, then it is known as creeping inflation.

Detailed explanation-3: -Galloping inflation (also jumping inflation) is one that develops at a rapid pace (dual or triple-digit annual rates), perhaps only for a brief period. Such form of inflation is dangerous for the economy as it mostly affects the middle and low-income classes of population.

Detailed explanation-4: -Inflation causes prices to rise, which can slow down an economy somewhat as both raw materials and labor gets more expensive. However the real connection between inflation and recessions is in the cure. Governments try to fix inflation by slowing down the economy.

Detailed explanation-5: -Galloping inflation is also known as jumping inflation. Galloping inflation refers to inflation that proceeds at an exceptionally high.” This is reserved for extreme forms of inflation – usually over 1, 000%.