Introduction
Inflation is a pervasive economic force that erodes the purchasing power of money over time. Simply put, it means that the same amount of money buys fewer goods and services than it did before. This occurs when there is a general upward trend in the prices of goods and services in an economy. As inflation rises, the real value of money falls.
Understanding inflation is crucial for individuals and businesses alike. For individuals, inflation affects the cost of living, savings, and investments. For businesses, it impacts pricing strategies, input costs, and ultimately, profitability. This article delves into the intricacies of inflation, exploring its causes, effects, and how it can significantly impact your financial well-being.
The Mechanics of Inflation
