Inflation


 * inflation**

rise in the general level of prices of goods and services in an economy over a period of time -A decline in the real value of money When the general price level rises, each unit of currency buys fewer goods and services An increase in the general level of prices implies a decrease in the purchasing power of the currency. Uncertainty about future inflation may discourage investment and saving. Low or moderate inflation may be attributed to fluctuations in real demand ervices, or changes in available supplies such as during scarcities as well as to growth in the money supply.

Low inflation may reduce the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn

When inflation is high what happens to the price of of goods?