How is inflation rate determined every week?

Question

I am from India. The inflation rate here is increasing every week. I want to know how is it computed? and what can we do to control it and bring it down?

Answer 1

Inflation is a variation in currency and value.  Goods and service pricing outpaces previous levels when no other variables have increased.

Answer 2

Here is an explanation from wiki...

http://en.wikipedia.org/wiki/Consumer_pr...

The arithmetic is simple but the politics can be a little confusing....As they say, "Figures don't lie, but liars figure."..........lol

I used to hear that the definition of inflation is too much money chasing too few goods, so that is another way to look at it.  You have to get your bankers and politicians to curb the money supply to bring it down....good luck with that one

Somebody once said that a large economy is like a runaway locomotive and no one knows where the brake lever is.

Answer 3

In simple terms it is determined by increases in prices. So to cut inflation prices would have to increase by a smaller rate. A decrease in demand will ensure this.

The Government can lower inflation on many goods by increasing taxation to lower disposible income e.g. as people pay more in tax, they have less to spend on goods and services. However the cost of having inflation targeting policies is that it could cause a decrease in growth and cause jobs to be lost. E.g. people spend less - so less workers are needed.