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: -Hyperinflation – an explanation Hyperinflation goes beyond inflation. In a nutshell, it is incredibly rapid inflation. If you were living in a country gripped by hyperinflation, you’d know about it. It refers to a situation where the prices of goods and services rise uncontrollably over a defined period of time.

Detailed explanation-4: -Based on speed, there are 4 different types of inflation – hyperinflation, galloping, walking, and creeping.