Inflation A Term You Need to Know
Inflation is a measure of the increase in the general price level of goods and services over a specific period of time, typically measured by the Consumer Price Index (CPI) or a similar index. It is expressed as a percentage change from one period to another.
Inflation is an important economic indicator because it affects the purchasing power of money. When prices are rising, the same amount of money buys fewer goods and services, meaning that inflation reduces the value of money over time. High inflation can lead to economic instability, as it makes it more difficult for consumers to plan their spending and for businesses to plan their investments.
Inflation is caused by a number of factors, including changes in the supply and demand for goods and services, changes in the money supply, and changes in government spending and taxes. Central banks often use monetary policy, such as adjusting interest rates, to control inflation and maintain stability in the economy.
Inflation is typically measured as a percentage increase over a set period of time, such as a year or a quarter. The rate of inflation can have a significant impact on the economy, and is closely watched by economists, policymakers, and investors.View More Definitions
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