a review of inflation and economic growth

in economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. when the price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. a chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time. the opposite of inflation is deflation. if economic growth matches the growth of the money supply, inflation should not occur when all else is equal. a large variety of factors can affect the rate of both. for example, investment in market production, infrastructure, education, and preventative health care can all grow an economy in greater amounts than the investment spending