ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on a year-on year basis. It effectively measures the change in the prices of a basket of goods and services in a year. In India, inflation is calculated by taking the WPI as base.

Detailed explanation-2: -Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.

Detailed explanation-3: -Inflation is the rate at which prices for goods and services rise. Inflation is sometimes classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation. The most commonly used inflation indexes are the Consumer Price Index and the Wholesale Price Index.

Detailed explanation-4: -Inflation can be defined as the overall general upward price movement of goods and services in an economy. The U.S. Department of Labor’s Bureau of Labor Statistics has various indexes that measure different aspects of inflation.

Detailed explanation-5: -Inflation occurs when there is a broad increase in the prices of goods and services, not just of individual items; it means, you can buy less for €1 today than you could yesterday. In other words, inflation reduces the value of the currency over time.