economics

inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Example

"Inflation of 8% meant that groceries that cost $100 last year now cost $108."

💡 Memory Tip

INFLATE a balloon — prices inflate (blow up) over time with inflation.

Etymology

From Latin 'inflare' meaning 'to blow into' — like inflating a balloon, prices puff up.

Common Misspellings

inflasioninflaioninflatoninlfation

Related Terms

deflationpurchasing powermonetary policy

See Also

CPI

Want to understand money better? Get money tips and new terms in your inbox.