Doubts about inflation rate raise?

Question

In india they are telling that inflation has raised over 8.75%

Can anyone explain in simple terms about what is the meaning of inflation and how it is determined.

Answer 1

inflation is the rise in prices... an increase in cinema ticket for $10 to $20 does not mean inflation... but if prices for all commodities increase then inflation is said to have taken place...

it is calculated by the use of a CPI consumer price index... it takes on average a basket of goods and services that an average household is said to consume during a year... the recorded change is expressed as a percentage...

8.75% is a significant margin and means an incraese in teh cost of living... during this time people are said to lose their purchasing power as their incomes are able to buy less than before.