WORLD HISTORY

Detailed explanation-1: -In general, inflation tends to devalue a currency since inflation can be equated with a decrease in a money’s buying power.

Detailed explanation-2: -How does inflation affect your savings? Money held in savings accounts hasn’t grown much in previous years due to historically low interest rates. But with inflation now running high, your savings are at risk of losing value in ‘real’ terms as you’ll be able to buy less with your money.

Detailed explanation-3: -Inflation can happen if the money supply grows faster than the economic output under otherwise normal economic circumstances. Inflation, or the rate at which the average price of goods or services increases over time, can also be affected by factors beyond the money supply.

Detailed explanation-4: -Inflation is the general rise in the prices of goods and services in an economy, over a period of time. It reduces the purchasing power of consumers, because each unit of currency can purchase fewer products with an increase in the general price levels.

Detailed explanation-5: -demand-pull, cost-push, and. inflation expectations.