What is inflation?It's a question which many people don't know and understand.

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

Your answer to your own question is not quite correct.  Inflation can be caused by printing more money, but that is not the definition of inflation.  Also, printing more money is not the only cause of inflation.

Inflation is defined as an increase in the average price of goods and services in a country.  Please note that this is the average price.  During a time when there is inflation, some prices may actually go down while others go up.  So just because the price of one thing goes up doesn't mean there is inflation.  And just because the price of something else goes down does not mean there is no inflation.

Instead, the government takes the prices of a set group of things that people need to buy.  They measure the price of those things and compare it to the price some time before.  If the price of all those things put together has gone up, we know there has been inflation.

krishna-agrawala's profile pic

krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted on

The term inflation refers to continued and widespread increase in an entire economy. Greater is the rate of increase in average prices greater is the degree of inflation.

Inflation means that same amount of money in terms of a given currency such as dollars or rupees is able to buy less of goods and services.

Inflation results from many different causes. In general it results from money supply increasing faster than the supply of goods and services. This can happen in many different ways such as printing of additional currency by government, or easier credit by banks. Another important cause of inflation is increased spending by people in expectation of higher future income. Another important cause of inflation is the increase in manufacturing cost, which among others includes government taxes and levies.

odame2's profile pic

odame2 | Student, Grade 9 | (Level 1) eNoter

Posted on

the answer is more u print money the higher prices go up.

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