What is Inflation
Economics
ScanSolve AI Answer
Inflation is a general increase in the prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money.
For example, if the inflation rate is 2% per year, it means that on average, prices for goods and services are 2% higher than they were the previous year. This means that $100 today will buy less in a year's time.
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