Understanding Inflation

byTulika Prashant

Today, the maximum retail price (MRP) of a 52-gram Cadbury Dairy Milk chocolate is ₹40. But, when your parents were your age, they paid only ₹10 for the same bar. That means, with ₹40, they could buy four chocolates, while you can buy only one now. Why this disparity, you may ask? This is because of inflation, which affects your purchasing power. Purchasing power refers to the amount of goods and services that a unit of currency can buy.

So, what is inflation?Inflation refers to a general increase in the prices of goods and services across the country over time. It means that most things like groceries and essentials like milk, vegetables, bus tickets, toys and haircuts start costing more than before. Why do prices go up?Prices can