Inflation is a State in which

By Mandeep Kumar|Updated : July 21st, 2022

Inflation is a state in which the general level of prices for goods and services is increasing. The rise in prices reduces the purchasing power of the currency. Inflation is a topic of discussion in most developing countries.

Answer: Inflation is a state in which the price of a set of expensive goods and services is increased over a certain period of time in an economy.

The formula to calculate inflation is:

Let the year be 2000.

Rate of inflation (2000) = Price level (2000) – Price level (2000-1)/Price level (2000-1) x 100

There are different kinds of inflation like demand-pull inflation, core inflation, hyperinflation, imported inflation, wage inflation, and cost-push inflation. Inflation can be good or bad. It depends on the rate of change and also on the individual viewpoint. The individuals who have invested in property, stock commodities, etc. may like inflation as it will increase the value of their assets. On the other hand, an individual holding cash will not like inflation as it diminishes the value of the currency.

Summary:

Inflation is a State in which

Inflation is a rate at which the prices of good and services is rising. It decreases the value of the currency. However, moderate inflation enables economic growth, adjustment of prices, etc.

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