Definition: The National Saving Certificate or NSC is the small-saving government scheme offered by the department of post and is available in several denominations of Rs 100, Rs. 500, Rs. 1000, Rs. 5,000, and Rs. 10,000. The National Saving Certificate is the fixed investment scheme backed by the government of India on which a fixed and regular interest is paid. NSC is one … [Read more...] about National Saving Certificate
Public Provident Fund
Definition: The Public Provident Fund, popularly known as PPF is the long-term saving scheme introduced by the Ministry of Finance (MoF) in 1968. The purpose of the PPF is to mobilize the small savings of individual by offering them investments that carry a reasonable return along with the income-tax benefits. The Public Provident Fund is a tax saving instrument backed by … [Read more...] about Public Provident Fund
Consumer Price Index
Definition: The Consumer Price Index or (CPI) measure the change in the price level of a basket of consumer goods and services. In other words, consumer price index is a measure that computes a weighted average of the prices of each item included in the commodity basket, such as food, clothing, furniture, drinks, etc. The basket of goods and services refers to the fixed list … [Read more...] about Consumer Price Index
Indexation
Definition: Indexation is a method by which the prices, wages, and contracts are partially or wholly compensated for any change in the general price level. Indexation is not actually a method to control inflation, but rather is used to adjust monetary incomes with a view to minimizing the undue gains and losses suffered by the different sections of the society because of … [Read more...] about Indexation
Price and Wage Control
Definition: The Price and Wage are the direct measures used to control inflation. In situations, where both the monetary and fiscal policy stands inadequate the price and wage control method is used to tame the situation. The price and wage control are studied conjointly because whatever is the cause of initial inflation, the cost-push and price-push inflation go together. … [Read more...] about Price and Wage Control
Fiscal Measures to Control Inflation
Definition: The Fiscal Measures to Control Inflation is comprised of government expenditure, public borrowings, and taxation. The Keynesian economists, also called as “Fiscalist” assert that the demand-pull inflation is caused due to an excess of aggregate demand over aggregate supply. The aggregate demand increases due to expenditure by the households, firms and government … [Read more...] about Fiscal Measures to Control Inflation
Monetary Measures to Control Inflation
Definition: A moderate rate of inflation is considered desirable for the economy, and it varies from country to country and from time to time. As the inflation crosses the desirable rate, several measures to control inflation are undertaken. Often, the countries use monetary measures to keep the situation under control. Monetary Measures to Control Inflation The monetary … [Read more...] about Monetary Measures to Control Inflation
Measures to Control Inflation
Definition: Inflation refers to the appreciable and persistent rise in the general price level. The economists do believe that the inflation beyond the moderate rate is bad and can be disastrous. Therefore, the inflation must be kept under control. What is a Moderate Rate of Inflation? There is no specific answer to this question. But, however, on the basis of the past … [Read more...] about Measures to Control Inflation
Cost-push Inflation
Definition: The Cost-Push Inflation occurs when the price rise due to the increase in the price of factors of production, Viz. Labor, raw materials, and other inputs which are essential for the final production of a product. As a result, the aggregate supply decreases, demand remaining the same, an increase in the price of commodities leads to an overall increase in the general … [Read more...] about Cost-push Inflation
Demand-pull Inflation
Definition: The Demand-pull Inflation occurs when, for a given level of aggregate supply, the aggregate demand increases substantially. In other words, demand-pull inflation exists when the aggregate demand increases rapidly than the aggregate supply. The increase in aggregate demand may be due to: Monetary Factors, i.e., an increase in the supply of money Real … [Read more...] about Demand-pull Inflation