Question

Distinguish between Creeping inflation and Running inflation.

Answer 1

Difference between Creeping Inflation and Running Inflation:

Creeping Inflation	Running Inflation
1. Creeping inflation occurs when there is a sustained rise in prices over time at a mild rate, say around $2$ to $3$% p.a. It is also called 'mild inflation'. 2. This type of inflation is not much of a problem and is good or healthy functioning of economy.	When the sustained rise in prices is over $8$% and generally around $10$% p.a. is called Running inflation. It normally shows $2$ digit inflation. This type of inflation is a warning signal indicating the need for controlling it.