🫥SBI PREVIOUS YEAR ESSAY 

🔺Pros & cons of Inflation

✅Self Written :- [@TargetDescriptive]



✅Inflation is an Economic term that refers to rise in the prices of most goods and services of day to day uses.

Inflation rate is primarily measured  by two main indices ,i.e on is Consumer price Index and WPI ,Wholesale price Index.
There are many factors of Inflationary boom in our country and Various stakeholders Including governmental Policies are responsible to Control it.

✅Central govt agency is in charge of adopting measures tp ensure smooth running of the Economy.Time to time RBI monetary policy committee Control money inflows in the market ,Central govt has fixed threshold level upper tolerance upto 6% and lower tolerance limit upto 2% .


✅Pros:-

1.A certain level of Inflation required to ensure that expenditure is promoted and agglomerating money is demotivated.

2.Moderate inflation is a sign of healthy economy ,As Market becomes more competitive ,Money continuously inflows throughout the period.

3.Inflation allows prices to adjust and to attain their real price.

4.Inflation could lead to economic Growth ,as it can be a sign of overall economic growth .
5.Having Stability,Firms can predict future  cost and prices propositions. 

✅Cons:-

1.It can weaken the value Of currency,higher the demand will be , more the money will be spend by the Consumer.
Due to this Purchasing power of currency decreases.

2.It also impacts cost of living or surviving within country ,when inflation is high,the cost of living gets higher as well.

3.Inequality,Inflation can predominantly affects low income Class.

4.Increase in money supply leads to Fluctuation in Exchange rate .

5.Inflation will reduce the real value of government bonds· Investors will demand higher bond yields to compensate; this will increase the cost of debt.


✅Conclusion:-
Controlling inflation has been a priority area for central govt ,every year Govt takes number of  steps   to curb inflation under its threshold limit ±2% of basis  rate. In recent years due to global unstability the inflation was on its peak .

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