What Causes ‘Inflation’ and Why Does It Affect Everyone?

Imagine you have a piggy bank with ten dollars. One day, you go to the store and find that your favorite candy now costs two dollars instead of one, even though you still only have ten dollars in your piggy bank! That's inflation. It happens when prices go up over time, and it affects everyone because money doesn't buy as much as it used to.

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Examples

  1. A loaf of bread that used to cost $2 now costs $3.
  2. Your parents had to pay less rent when they were young, but now you have to pay a lot more.
  3. The same toy you wanted for your birthday is twice as expensive as it was last year.

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Categories: Economics · inflation· money· economy