Inflation

A rise in the general level of prices or an increase in the general level of prices in an economy that is sustained over time is known as Inflation.

Causes of Inflation

  • Demand-Pull Inflation: A mismatch between demand and supply pulls up prices. Either the demand increases over the same level of supply, or the supply decreases with the same level of demand and thus the situation of demand-pull inflation arise.
  • Cost-Push Inflation: An increase in factor input costs (i.e., wages and raw materials) pushes up prices. The price rise which is the result of increase in the production cost ....
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Indian Economy & Socio-economic Development