What is inflation

Answer 1

Inflation is the general increase in the price of goods and services in an economy over a period of time. This means that the purchasing power of currency decreases, as it requires more dollars to buy the same amount of goods or services than it did before. Inflation can occur due to various reasons such as an increase in the supply of money, high demand for goods and services, or a decrease in the supply of goods and services. Inflation is measured by a percentage increase in the Consumer Price Index (CPI) and can have significant impacts on the economy, including reduced purchasing power and investment returns, and increased interest rates and unemployment.