Q.Define the term ‘Inflation’.

Inflation is a persistent rise in the general price level over time, which lowers the value of money.

In the Tamil Nadu HSC Class-12 Economics (Monetary Economics) syllabus, inflation is defined as a sustained and appreciable increase in the general price level of goods and services in an economy over a period of time. Key points:

• It refers to a rise in the general (average) price level, not merely a rise in the price of one or two goods.
• The rise must be persistent over time, not a temporary or seasonal spike. …