Inflation

Definition

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.


Remember This

Central Banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

Types of Inflation

Creeping Inflation; Walking Inflation; Galloping Inflation; Hyperinflation

Different Inflations Based on Rate of Rise in Prices

Creeping Inflation

Creeping or mild inflation is when prices rise 3 percent a year or less. According to the Federal Reserve, when prices increase 2 percent or less it benefits economic growth.

Impact: This kind of mild inflation makes consumers expect that ....

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