Imagine you and your friend both have piggy banks. You save money in a piggy bank that gets more coins every year, that's like inflation. But if your friend’s piggy bank gets way more coins, they’re experiencing higher inflation. Different countries are like different piggy banks, some get more coins (inflation) than others because of things like how much money is printed or how people spend it.
Examples
- Piggy bank A gets 10 more coins every year, piggy bank B gets 20 more.
- A candy bar costs $1 today and $1.50 next week in one country, but just $1.10 in another.
- Your neighbor buys a house for $300,000 this year, it's $340,000 by next year.
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See also
- Why Do Inflation Rates Vary Across Countries?
- How Does the Stock Market Actually Influence Inflation?
- How Does Taxation Actually Affect Inflation?
- How Does Currency Devaluation Affect Everyday Life?
- What are global capital flows?