Inflation can be defined as the increase in pricing of products and services and the resultant fall in the purchasing power of money. Measuring inflation is critical for any business. Inflation impacts the input price of goods and services and needs to be taken into account for pricing strategies. It also impacts the purchasing power of consumers and does thereby play a role in revenue generated by businesses. When we talk about measuring inflation, we aren't interested in the price of a single product. The basket of products and services that we usually buy or need is what we measure inflation against.
The most common measure of inflation that we can see being discussed by the central banks, government, and media is consumer price inflation (CPI). This may be called something slightly different in other countries. It is used to measure goods and services...