• Increase in general prices is commonly referred to as inflation.

• Increase in population results in increase in demand, thereby increasing the price levels in the economy.

• In a culture of consumerism, people spend more money than savings. This is said to be inflationary in nature.

• When there is increased supply of money, too much money is trying to purchase too few good. Thus, the price levels of the goods increase.

• An appreciating Rupee makes imports costlier, thus inducing ‘imported inflation’.