Q.Write a short note on: Meaning of Inflation

Inflation is a sustained rise in the general price level, accompanied by a fall in the purchasing power of money.

Explanation

Inflation refers to a situation in which there is a continuous and considerable rise in the general level of prices of goods and services in an economy. It is not a rise in the price of one or two goods, but a general and persistent rise in prices. As prices rise during inflation, the value or purchasing power of money falls — a given amount of money buys fewer goods than before. Inflation is generally caused by an excess of aggregate demand over the available supply of goods (demand-pull) or …