Inflation Video Lecture | Crash course for UPSC (Hindi)

Ans. Inflation refers to the sustained increase in the general price level of goods and services in an economy over a specific period of time. It means that the purchasing power of money decreases as the prices of goods and services rise.

Ans. Inflation can be caused by various factors, including: - Demand-pull inflation: When the demand for goods and services exceeds the available supply, it leads to an increase in prices. - Cost-push inflation: When the production costs of goods and services rise, such as wages or raw material costs, it can result in inflation. - Monetary inflation: When there is an increase in the money supply in an economy, it can lead to inflation as more money chases the same amount of goods and services. - Expectations: If people expect prices to rise in the future, they may increase their spending, leading to increased demand and inflation.

Ans. Inflation can have both positive and negative impacts on the economy. Some of the effects of inflation include: - Decreased purchasing power: As prices rise, the value of money decreases, leading to a decrease in purchasing power. - Reduced savings: Inflation erodes the value of savings over time, as the same amount of money can buy fewer goods and services. - Uncertainty: High inflation rates can create economic instability and uncertainty, making it difficult for businesses to plan and invest. - Redistribution of wealth: Inflation can impact different groups of people differently, redistributing wealth from savers to borrowers.

Ans. Inflation is measured using various indicators, including the Consumer Price Index (CPI) and the Producer Price Index (PPI). These indices track the changes in the prices of a basket of goods and services over time. By comparing the current prices to a base period, inflation rates can be calculated.

Ans. Central banks and governments use various tools to control inflation. Some common measures include: - Monetary policy: Central banks can adjust interest rates to control inflation. Higher interest rates can reduce borrowing and spending, thus slowing down inflation. - Fiscal policy: Governments can use taxation and spending policies to influence inflation. Higher taxes and reduced government spending can help control inflation by reducing demand. - Supply-side policies: Governments can implement policies that aim to increase the supply of goods and services, which can help alleviate inflationary pressures. - Wage controls: In some cases, governments may implement wage controls to limit wage increases, which can help control inflation. However, this measure is often controversial and can have negative effects on workers' standards of living.