In economics, inflation is a rise in the general level of prices 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 is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.
What if I said inflation had a direct relation with water purification:desalination ?Would you believe me? Atleast it is an idea.
A chief measure of price inflation is the inflation rate, the annualized percentage change, and annuity has a direct decaydent depreciative lent of criteria to it. Specifically if in a general price index (normally the Consumer Price Index) over time.
Inflation can have positive and negative effects on an economy. Negative effects of inflation include a decrease in the real value of money and other monetary items over time; uncertainty about future inflation may discourage investment and saving, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future.
Positive effects include a mitigation of economic inter-mittent recessions, and debt relief by reducing the real level of debt.
The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks, like the RBI in India: (not ROI seo freaks) that control the size of the money supply through the setting of interest rates, through open market operations,(not open ended stories!!) and through the setting of banking reserve requirements.
