Give detail explanation about the Inflation

• Price index is computed at a particular point in time, inflation over a time period, mainly one year
• Inflation may just as well be defined as percentage change in price level.
• Inflation is independent of which year we use as our base year for our price index.
• You very often hear that inflation is "percentage change in prices" though keep in mind that "prices" is then short for the price level.
• Since the price level may be defined in many different ways (using different goods and different weights in basket), inflation may be defined in many different ways.
• if price index decreases between two points in time we say that inflation is negative or that we have deflation.