Syllabus: GS-III
Subject: Economy
Topic: Inflation
Issue: Inflation
Context:  A slight decrease in food price inflation contributed to a three-month low   in retail inflation.
Prelims connect:
Inflation is an increase in the prices of goods and services.
Core inflation Vs headline inflation:
- Core inflation = Headline inflation – (Food and Fuel) inflation.
- Headline Inflation is the measure of total inflation within an economy.
- It includes price rise in food, fuel and all other commodities
- Core inflation does not consider the inflation in food and fuel
Wage price spiral:
- A wage price spiral occurs when workers demand higher wages in response to rising prices, and employers raise prices in response to higher wage costs.
- This can create a cycle of wage increases and price increases, leading to overall inflation in the economy
