Inflation Grimreaper of Money

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What is Inflation?

Inflation is the rate at which the price of goods and services increases in the economy or the rate at which the currency of that economy loses its purchasing power.

What is Deflation?

Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy.

How do we measure Inflation?

Inflation is measured by tracking the price changes of a basket of goods and services over time.

There are two types of basket for measuring inflation

1. Consumer Price Index 2. Wholesale Price Index 

Are there any special cases for inflation?

Yes, there are special cases of inflation. Follow ahead to read more.

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Hyperinflation

It is an extreme form of inflation in which the prices in an economy increase at a very rapid pace and the inflation goes out of control. The increase becomes exponential, typically measuring more than 50% per month.

Stagflation

It is an economic condition that combines the challenges of stagnation and inflation. It’s characterized by slow economic growth, high unemployment, and rising prices.

Disinflation

It refers to a slowdown in the rate of inflation. It’s not a decrease in the overall price level that would be deflation- but rather a reduction in the rate at which prices are rising.

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