Inflation is termed as Increment in money supply in the market leads to a rise in general level of prices of goods and services in a economy over a period of time. It reflects a reduction in the purchasing power per unit of money/Currency. As inflation rises, every unit of currency you own buys a smaller percentage of a good or service.
It can be understood like this suppose you are buying a chocolate for 5 rs and for 50 rs you buy 10 chocolates, now suppose the price of chocolate went up by 2 rs as the chocolate making company learned from news that there is a demand in the market, so they raised the price, hence under Inflation,with this 50 rs you will be able to buy only 7 chocolates.
