e.µ Too much money chasing.µ Inflation is a state in which the value of money is falling i.€ Inflation is nothing more than a sharp upward rise in price level. too few goods. price are rising.µ .

Demand pull inflation Takes place when the total demand for goods and services surpasses that of the total supply. € Cost push inflation A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials. € .

Consumer Price Index € Wholesale Price Index € .

€ CPI is a measure estimating the average price of consumer goods and services purchased by households. It is a price index determined by measuring the price of a standard group of goods meant to represent the typical market basket of a typical urban consumer. . region. or nation). The percent change in the CPI is a measure estimating inflation. CPI measures a price change for a constant market basket of goods and services from one period to the next within the same area (city.

and was one of the economic indicators available to policy makers until it was replaced by most developed countries by the CPI market. Some countries (like India and The Philippines) use WPI changes as a central measure of inflation.€ WPI was published in 1902. However. WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market. index in the 1970. India and the United States now report a producer price index instead. .

previous the base year was taken 1993 & 1994.In INDIA. the base year is changed to 2004-05. € Earlier there were 435 commodities but now the commodity basket comprises 676 items. € . € But now after the technical report submitted by working group in 2008.

Effects of Inflation on Business Community € On Fixed Income Groups € On Investors € deterioration of gross domestic savings and less capital formation € .

Thank you .