What Is Inflation | Frenly Guru

Inflation is an increase in the average price of goods and services in an economy over time, measured using a price index such as the [[consumer-price-index|Consumer Price Index]] (CPI), resulting in a reduction in the purchasing power of money. This economic concept is a subclass of economic problems and is widely attributed to changes in the money supply, demand shocks, supply shocks, interest rates, and inflation expectations, as explained by economists like [[milton-friedman|Milton Friedman]] and [[john-maynard-keynes|John Maynard Keynes]]. Inflation is the opposite of [[deflation|deflation]], a decrease in the general price level of goods and services. The inflation rate, typically measured as the annualized percentage change in a general price index, is a key indicator of economic health, closely monitored by central banks like the [[federal-reserve|Federal Reserve]] and the [[european-central-bank|European Central Bank]].