ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price inflation is an increase in the price of a collection of goods and services over a certain time period. Strong demand and supply shortages tend to cause price inflation. Price inflation can also be caused by the cost of inputs to the production process increasing.

Detailed explanation-2: -What Is Inflation’s Primary Effect? Inflation causes the purchasing power of a currency to decline, making a representative basket of goods and services increasingly more expensive.

Detailed explanation-3: -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-4: -Demand-pull inflation can be caused by strong consumer demand for a product or service. When there’s a surge in demand for a wide breadth of goods across an economy, their prices tend to increase.

Detailed explanation-5: -Inflation is an increase in the prices of goods and services. The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households (see Explainer: Inflation and its Measurement).