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What is the concept of inflation in economics?
Why does the cost of a cup of coffee constantly rise over the decades, and what causes the purchasing power of money to drop?
M
MoneySmart
asked 4d ago · 10 rep
1 Answer(s)
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Inflation occurs when the supply of money circulating in an economy grows faster than the actual production of goods and services. When consumers have more money chasing the exact same amount of goods, businesses raise prices, reducing the value of each individual dollar.
E
EconProf
answered 4d ago