prices and inflation

Prices refer to the amount of money needed to buy goods or services. Inflation is the rate at which these prices increase over time, meaning that money gradually loses its purchasing power. When inflation is moderate, it indicates a steady rise in prices, which can be healthy for the economy. However, high inflation can reduce the value of savings and make everyday expenses more expensive, while very low inflation or deflation can slow economic growth. Overall, inflation reflects how the cost of living changes and influences economic decisions for consumers, businesses, and policymakers.