What is Inflation and what are the types of Inflation?
What is Inflation A persistent increase in a country's average level of prices for goods and services is referred to as inflation, and it is quantified as an annual percentage change. When there is inflation, things cost more money over time. To put it another way, as inflation increases, a smaller portion of a good or service may be purchased with each rupee you hold. Inflation occurs when prices increase or, conversely, when the value of money decreases. The purchasing power of a rupee refers to how many real, observable items or genuine services one rupee can currently purchase. The purchasing power of money decreases as inflation increases. Theoretically, a Rs. 20 pen will cost Rs. 20.02 in a year, for instance, assuming inflation is 2% per year. Your rupee does not purchase as much after inflation as it once did. Types of Inflation Galloping Inflation : Mild inflation may take on the characteristics of galloping inflation if it is not controlled and becomes uncontrollable. G...