Inflation refers to a sustained increase in the prices of goods and services, which reduces the purchasing power of money. In India, inflation is commonly measured using the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Factors such as rising fuel costs, supply shortages, and increased demand can contribute to inflation.
The Reserve Bank of India uses monetary policy measures, including changes to the repo rate, to manage inflation. For competitive examinations, candidates should understand the causes of inflation, its effects on households and businesses, and the role of the RBI in maintaining price stability.
