1. Walking Inflation—If the general price level of the economy increases at rate of about 5-6 per cent per annum, it is called walking inflation.

Running Inflation—When the price level rises a bit faster and the rate of growth of the price level is about 10 per cent per annum, it is called running inflation. At this stage, the inflation rate just becomes double digited. Here, the price movements are compared with the trotting of a horse.

2. Two reasons for soaring food prices are: 

1. The weakest monsoon rains in the last seven years and 

2. Floods in parts of the country have hurt the farm output.

3. Two measures to combat inflation are:

1. Increasing Growth Rate of Agricultural and Industrial Output— This can be achieved by providing the necessary raw materials and the infra-structural facilities needed for the growth of agriculture and industry. 

2. Control Money Supply—Demand-pull inflation is caused by increase in money supply so the money supply can be kept under control by the commercial banks through restricting the flow of credit into the economy. This will reduce the purchasing power of the people and hence their demand for goods and services thus help to curb inflation.