ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -The increase in the general level of prices may be caused by many factors like an increase in the money supply, a decrease in the aggregate level of output, an increase in the effective demand, an increase in income, the rapid growth of population, etc.

Detailed explanation-3: -If the money supply grows too big relative to the size of an economy, the unit value of the currency diminishes; in other words, its purchasing power falls and prices rise.

Detailed explanation-4: -Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

Detailed explanation-5: -The general price level is a hypothetical measure of overall prices for some set of goods and services (the consumer basket), in an economy or monetary union during a given interval (generally one day), normalized relative to some base set.