GENERAL KNOWLEDGE

Detailed explanation-1: -Inflation is the general rise in the prices of goods and services in an economy, over a period of time. It reduces the purchasing power of consumers, because each unit of currency can purchase fewer products with an increase in the general price levels.

Detailed explanation-2: -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-3: -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-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: -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.