nflation is a sustained increase in the general price level of goods and services in an economy, leading to a decrease in the purchasing power of money.n other words, over time, the same amount of money buys fewer goods and services.
nflation can be caused by various factors, including increased demand, rising production costs, or excessive money supply.o measure inflation, the Consumer Price Index (CPI) is often used, reflecting the change in the cost of a fixed basket of goods and services consumed by the average household.
nderstanding inflation is important for effective personal financial management and making informed economic decisions.