Inflation

#inflation

In economics, inflation is a sustained increase in the general price level 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. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index over time. Inflation affects an economy in various ways, both positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring that central banks can adjust real interest rates, and encouraging investment in non-monetary capital projects. Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.

;

Top Trending News Videos for #inflation  (Personalize)

  • Now Playing
    Video Thumbnail
    32m
    • BOJ Hikes Rates, No Indication of Further Tightening
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Are cash-back apps like Ibotta and Rakuten worth it?
    • Scripps News
  • Now Playing
    Video Thumbnail
    • Restaurant chains respond to inflation with incentives
    • ABC News
  • Now Playing
    Video Thumbnail
    • Misguided to Think Fed Will Provide Any Certainty: Sahm
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • BlackRock: BOE Could Surprise With Rate Cut Signaling
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Commodities Spike Could Trigger Fed Hike: Antimo's Monkam
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Borish's Cocoa-Nvidia Inflation Gauge
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Chaos of Division
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Mike Pence Says He Won't Endorse Trump
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Consumers Feeling Inflation, Election Stress: UMich's Hsu
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Marathon's Richards Thinks the Fed Will Keep Rates Elevated
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Inflation hasn't hit this Westside Tucson store
    • KGUN 9 Tucson
  • Now Playing
    Video Thumbnail
    • Realtor deal could spur home sales -portfolio manager
    • Reuters
  • Now Playing
    Video Thumbnail
    • Wall St. ends higher on AI enthusiasm; Fed in focus
    • Reuters
  • Now Playing
    Video Thumbnail
    • How to get the most bang for your buck using coupons
    • WFTS Tampa Bay
  • Now Playing
    Video Thumbnail
    1h
    • BOJ Won't Rush Further Hikes, Former Official Momma Says
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Fed's tone may be more cautious -portfolio manager
    • Reuters
  • Now Playing
    Video Thumbnail
    • Wall Street drops, led by tech-related shares
    • Reuters
  • Now Playing
    Video Thumbnail
    1h
    • BOJ Delivers First Interest-Rate Hike Since 2007
    • Bloomberg
  • Now Playing
    Video Thumbnail
    • Business Lookahead: Eyes on the Bank of Japan
    • Reuters