We keep hearing the word “Inflation” every week in India. What is it?
Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole. Inflation is an upward movement in the average level of prices. Its opposite is deflation, a downward movement in the average level of prices. The boundary between inflation and deflation is price stability.
inflation is caused by a combination of four factors:
- The supply of money goes up.
- The supply of other goods goes down.
- Demand for money goes down.
- Demand for other goods goes up.
How it will be calculated in India?
Wholesale Price Index (WPI)
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