Inflation

Inflation is an increase in the general price level of goods and services in an economy over a period of time. It is usually measured by the percentage change in the consumer price index (CPI), which is a measure of the average price of a basket of goods and services consumed by households.

Inflation can have a number of negative impacts on an economy, including reducing the purchasing power of money, increasing uncertainty and complexity in financial planning, and redistributing wealth from savers to borrowers.

There are a number of factors that can contribute to inflation, including an increase in the supply of money, an increase in the cost of production, and an increase in demand for goods and services.

Central banks and governments often use monetary and fiscal policy to try to manage and control inflation. For example, they may use interest rates or taxes to try to influence the level of demand in the economy and keep inflation in check.

Inflation is an important economic concept that has significant implications for individuals, businesses, and governments. It is something that is closely monitored and managed by policymakers and investors around the world.