Inflation

Inflation:
Inflation is a rise in the general level of 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.


A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index over time.

Negative effects of inflation include a decrese in the real value of money and other monetary items over time, uncertainty over future inflation may discourage investment and savings and high inflation may lead to shortage of goods if consumers begin hoarding out of concern that price will increase in the future.