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What does mean by inflation and where it impacts in our day to day life ?

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What all things are considered for the calculation of inflation rate and what does mean when it has lower/higher in numbers ?

posted Jul 22 by Ganesh

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1 Answer

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Inflation means increment of prices of various product and services.

Each government calculates the WPI (Wholesale Price Index) and RPI/CPI (Retail Price Index/Consumer price index). Which has a basket of goods and services with their respective weight as per the consumption pattern of the society/country where it is calculated. While WPI carries the price collected from wholesale market, is a more stable number and has impact on the prices in longer run, whereas CPI carries the price collected from retail market, is a more fluctuating number and has a short term impact.

In both the cases lower the number means lower the inflation and higher the number means higher the inflation.

answer Jul 24 by Salil Agrawal
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