What is inflation

Question

What is inflation

Accepted Answer

Inflation is the rate at which the general level of prices for goods and services is rising, leading to a decrease in purchasing power.

Inflation is measured by the Consumer Price Index (CPI) which tracks the prices of a basket of goods and services over time.
Causes of inflation include increased demand, cost-push factors like rising production costs, and monetary factors like printing more money.
Types of inflation include demand-pull inflation, cost-push inflation, and built-in inflation.
Inflation erodes the purchasing power of money, leading to a decrease in real wages and savings.
Hyperinflation is an extreme form of inflation where prices increase rapidly as the currency loses its value.

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