Macroeconomics

Inflation

Definition

What is Inflation?

A sustained increase in the general price level, reducing the purchasing power of money.

Example in practice

If inflation reaches 15%, cash must earn more than 15% to preserve purchasing power before tax.

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The total market value of final goods and services produced within a country during a period.

Gross domestic product adjusted for changes in prices.

Gross domestic product measured at current prices without adjusting for inflation.

A market environment in which investors favour higher-risk assets.

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