Inflation is phenomenon relating to rise in general price level of various goods and services in an economy.
There are several causes of inflation one of which is increased money supply in an economy. In simple terms it is the excess money in economy than actually needed.
Increased money supply is caused because of cheap credit available through banks, more people holding cash for transaction, precaution and speculative purposes, savings etc.
Now, as a common shop-keeper interested in maximizing his profits, I know that people have more money so even if i increase the prices of goods and services, they (general public) will still buy my products and services.
This trend continues throughout the economy and thus results in rising pricing levels termed as inflation.
