Introduction to Inflation
What is inflation?
The rate at which the price of goods and services rise over a given period of time is referred to as inflation.
Inflation has a major effect on the economy of a country or can even impact the life of individuals on a daily basis.
Causes of Inflation
Measures Governments put in place to combat/control inflation
a) Monetary policy
This is a deliberate move by the government through the central bank to regulate and control the money supply in the economy which may lead to demand price inflation. The policies include:
b) Fiscal policy
These are the measures taken by the government to influence the level of demand in the economy through taxation process. They include
c) Statutory Measures
These are laws made by the government to help in controlling the inflation. They include:
Sampled KNEC KCSE Questions & Answers
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