Answer Posted / raj dasari

Inflation : To much money chasing too few goods. goods will
become costlier as people who have money will keep on
purchasing the goods which are limited making it impossible
to the common man to purchase. supply decreases and demand
increases.

Governament has taken steps to minimise the inflation rate
from 6.67 to 3.24 ( as on 2nd feb ) by increasing the cash
reserve ratio in banks and also interest on fixed deposits.

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