10.2 -low and stable rate of inflation

Inflation

is defined as a sustained increase in the general prices levels

deflation

is defined as a sustained decrease in the general price level

disinflation

inflation occurs at a lower rate

The consumer price index (CIP)

is a measure of cost of living for the typical household ,and compoare the values of a basket of goods and services in one year with the value of same basket in base year

formula of CPI

Cost of the bundle of goods in the current period / Price of the bundle of goods in the base period x 100.

inflation rate

(later CPI- Earlier CPI /Earlier CPI )X100

rate of inflation with value

(Y2-Y1/Y1) *100