What is inflation?

Inflation is a state where the prices of commodities increase and the value of money decreases. This is a common phenomenal but the psychological aspect made this as giant problem. The prices have been increasing with power of the expenditure increase in contrast to the volumes of demand and supply. In the market any fluctuation in the demand or supply forces results in the price rise or decreases. The price rise is known as inflation and the price fall can be said as deflation. But so far there is no sign of deflation in the nation. The inflation states rise in prices. In common man language inflation refers to the rise in the prices of commodities. The apex bank takes measures to check the liquidity or the velocity of the currency to check the inflation.