Inflation

money · economics · prices

Prices go up. When inflation happens, things in stores cost more money than they did before. A candy bar that cost one dollar might cost two dollars a year later.

Your money shrinks. Inflation means your money doesn't go as far. If you have ten dollars, it might buy you fewer things than it could have bought last year.

We measure it. People use something called a Consumer Price Index, or CPI, to track how much prices have increased. It's like a report card for how fast things are getting more expensive.

The opposite exists. Deflation is the opposite of inflation, where prices actually go down and your money buys more stuff. This is pretty rare and can sometimes cause problems for the economy.