What is Inflation?
Inflation is the rate of increase in prices over a given period. It represents how much more expensive a set of goods or services has become over some time (most commonly a year). Inflation is typically a broad measure. For example, the overall increase in the prices or the increase in the cost of living in the country. But it can also be calculated as a narrow measure such as the increase in the price of a particular good or service.
Read More: List of Countries by Inflation Rate 2023
Effects of Inflation on the Economy
Effects of Inflation on the Economy: Inflation is the sustained rise in prices of goods and services over time. This leads to the erosion of purchasing power. Purchasing power is the value of a currency expressed in terms of the number of goods and services that can be bought by one unit of the currency.
During periods of rising prices, uneven inflation acts like a hidden tax, hitting certain groups disproportionately. This loss of buying power, particularly for those already struggling, is the most concerning consequence of inflation.
In this article, we will read about Inflation and mainly the effects of inflation on the economy. We will also discuss the types and causes of inflation.
Table of Content
- What is Inflation?
- Types of Inflation
- Causes of Inflation
- Effects of Inflation on the Economy
- Effects of Inflation on the Indian Economy