Inflation is the rate at which prices for goods and services rise. Inflation is sometimes classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation. The most ferent kinds of inflation. Indeed, the word inflation is often used synony-mously with "price increase." But there is also a different, more spe-cific, definition of inflation—a rise in the general price level caused by an imbalance between the quantity of money and trade needs. This "inflation" has but one origin—the central bank. inflation is the net result of sophisticated dynamic interactions of these six groups of explanatory factors. That is to say, inflation is always and everywhere a macroeconomic and institutional phenomenon. Key Words- Inflation, Macroeconomic Theory I. INTRODUCTION The study of causes of inflation has probably given rise 1. Decrease in unemployment. When the price of goods increase, so will revenues and, subsequently, profits for private enterprises. The influx of capital will enable businesses to expand their operations by hiring more employees. 2. Decrease in the real value of debt. As explained above, inflation is associated with a decrease in interest rates. Inflation has consequences for people and firms throughout the economy, in their roles as lenders and borrowers, wage-earners, taxpayers, and consumers. The chapter concludes with a discussion of some imperfections and biases in the inflation statistics, and a preview of policies for fighting inflation that we will discuss in other chapters. Inflation is when prices rise, and deflation is when prices fall. You can have both inflation and deflation at the same time in various asset classes. When taken to their extremes, both are bad for economic growth, but for different reasons. That's why the Federal Reserve, the nation's central bank, tries to control them. In economics, inflation is a general increase in the prices of goods and services in an economy. [3] When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. thought to be essential for sustainable economic growth. By sustainable economic growth, we mean steady economic growth year after year, and not the boom-bust cycles typically associated with high-inflation countries, in which rapid economic growth alternates with deep recessions and financial instability. Inflation - definition Inflation refers to a rise in the average level of prices sustained over time, which also corresponds to a fall in the internal (domestic) purchasing power of money. This can be contrasted with deflation which is a fall in the average level of prices, and disinflation, which Inflation is the rate at which the general price level for goods and/ or services rises, and subsequently, the purchasing power of the currency declines. It is one of the most quintessential topics as far as the Economic s subject is concerned. For practical purposes too, one must have adequate knowledge about Inflation and its related aspects. Inflation occurs when prices rise across the economy, decreasing the purchasing power of your money. In 1980, for example, a movie ticket cost on average $2.89. By 2019, the average price of a According to Coulborn inflation can be defined as, "too much money chasing too few goods." According to Parkin and Bade, "Inflation is an upward movement i