Together these molecules form a liquid. However, taken as separate molecules both of these are gases. The argument is that since together these molecules form the liquid water that separately they must be a liquid as well. The fallacy of division is also the opposite of the fallacy of composition.
See also consumer price index, core inflation, cost-push inflation, demand-pull inflation, GDP deflator, producer price index, purchasing power risk. Inflation. Inflation is a persistent increase in prices, often triggered when demand for goods is greater than the available supply or when unemployment is low and workers can command higher salaries. Moderate inflation typically accompanies economic growth.
Inflation generally means overall increase in the price of goods and services ( Tradable commodities) in long term. It is caused by various macro economic factors. Rate of inflation is a metric to indicate how much price level is varied (increased) compared to previous financial year. For instance, a commodity A sold at 100 bucks on April 2013 and at 120 bucks at March 2014. That means inflation in that year was 20 %.