What is Inflation?
Inflation is the general increase in the prices of goods and services over time, leading to a decrease in the purchasing power of money. It is typically measured as an annual percentage increase in the consumer price index (CPI).
Inflation is the general increase in the prices of goods and services over time, leading to a decrease in the purchasing power of money. It is typically measured as an annual percentage increase in the consumer price index (CPI).
Introduction: Inflation represents the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, to keep the economy running smoothly. Understanding inflation is crucial for both policymakers and investors, as it affects decisions related to interest rates, monetary policy, and investment strategies. Inflation can be measured through various indices, including the Consumer Price Index (CPI) and the Producer Price Index (PPI), which track changes in the price level of a market basket of consumer goods and services.
Key Drivers of Inflation:
Strategies to Combat Inflation: