what is Inflation?

 

Inflation 

Inflation 

Inflation means a general rise in the prices of goods and services over time, which reduces the purchasing power of money.

In simple terms, when inflation goes up, the same amount of money buys fewer things than before.

🔹 Why Inflation Happens

Increased demand: When people buy more than what’s available.

Rising costs: When raw materials or wages go up.

Monetary policy: When too much money is in circulation.

🔹 Effects of Inflation

Consumers: Prices rise, daily life gets more expensive.

Savers: The value of saved money decreases.

Borrowers: Benefit if loans are fixed-rate, since money value drops.

🔹 Example

If inflation is 3%, something that costs $100 this year will cost $103 next year on average.

Tags:

#Inflation #Economy #Finance #Prices #MoneyValue