Inflation demotes the economic situation characterized with an increase in the prices of goods and services over time. An increase in the money supply can lead to inflation.
The most common measure of inflation is a statistic called the Consumer Price Index (CPI). CPI examines the weighted average of prices of a basket of consumer goods and services and inflation measured by CPI is defined as the change in the prices of a basket of goods and services that are typically purchased by specific groups of households.