About Inflation

Now a whenever you switch to a news channel the top news is inflation. If you don’t know about that please spend sometime to know about inflation. Inflation means a sustained increase in the general level of goods and services. The dollar value is unstable and is determined in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year. After inflation, your dollar can't buy the same goods as before and the people have to pay extra for the same gum.