Q.Define the term 'Inflation'.

Inflation is a sustained, general rise in the price level accompanied by a fall in the value of money. It is classified by cause into demand-pull inflation (aggregate demand outrunning supply — 'too much money chasing too few goods') and cost-push inflation (rising costs of production such as wages and raw materials being passed on as higher prices). Inflation redistributes income: debtors, producers and holders of real assets tend to gain, while creditors, savers and fixed-income groups lose. …