Inflation

“INFLATION” Inflation, in economics, is used to describe an increase in the value of money; in relation to the goods and services it will buy. Inflation is the sustained rise in the aggregate level of prices measured by an index of the cost of various goods and services. Repetitive price increase cause the purchasing power of money and other financial assets with fixed values, creating serious economic uncertainty. Inflation results when actual economic pressures anticipation …

…real wealth; other assets with flexible values, such as real estate, art, raw materials, and durable goods, may keep pace with or exceed the average inflation rate. Workers in the private sector strive for cost-of-living adjustments in wage contracts. Borrowers usually benefit while lenders suffer, because mortgage, personal, business, and government loans are paid with money that loses purchasing power over time and interest rates tend to lag behind the average rate of price increases.