|Inflation and Price Converter||Inflation Rate by Countries Chart|
Price inflation is simply an increase in the price of a good or service over time. Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.When the general price level rises, each unit of currency buys fewer goods and services.The consumer price index (CPI) is the most common measure of price inflation, it is the rate of increase in prices over a given period of time.
| The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
To measure it, government agencies conduct household surveys to identify
a basket of commonly purchased items and then track the cost of
purchasing this basket over time.CPI is one of the most frequently used
statistics for identifying periods of inflation or deflation.
Inflation's effects on an economy are various and can be simultaneously positive and negative. Long-lasting episodes of high inflation are often the result of lax monetary policy. Indeed, many countries have grappled with high inflation—and in some cases hyperinflation. Today, most economists favor a low and steady rate of inflation. Modest inflation usually means that the central bank won't be raising interest rates to slow economic growth.
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