Lesson 1 of 5 • 69 upvotes • 9:51 mins
Definition of Inflation Inflation is basically a rise in prices. A more exact definition of inflation is a situation of a sustained increase in the general price level in an economy. Inflation means an increase in the cost of living as the price of goods and services rise. Inflation and value of money Inflation leads to a decline in the value of money. “Inflation means that your money won’t buy as much today as you could yesterday.” The inflation rate is the annual percentage change in the price level.