Causes of Inflation

Inflation is defined as the rise in the level of prices of the general commodities, services and goods over a time period with which it is calculated. The causes are many and varied. The first reason is the price hike of imported raw material costs. This is mainly due to fall or change in the value of the international currency in the foreign exchange markets. Rising labor costs is also a huge problem which is mainly due to the increase in wages for improved productivity. The taxes which are imposed by the government is also a major play since some of them are pretty indirect.