INFLATION IS THE RATE AT WHICH PRICES INCREASE OVER A CERTAIN PERIOD OF TIME.

Abstract

The article discusses the phenomenon of inflation, which is defined as the rate at which prices increase over a certain period of time. It explains how inflation reduces the purchasing power of money and is usually measured by the Consumer Price Index (CPI). The article also examines the difference between moderate and high inflation, showing that while a low and stable level of inflation supports economic growth, high inflation harms savings and increases the cost of living. In addition, the text briefly mentions deflation as an opposite process that can slow down production and employment. The importance of maintaining price stability for sustainable economic development is emphasized.