Automated Ban List [Latest: SimliKyle] - Page 847

On August 05 2011 00:05 shinosai wrote:


Oh, you needed me to get a dictionary definition to let you know what inflation is? No problem, my good sir.

"In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]"

Now, you see, when the government prints more money, the dollar becomes less valuable. Each unit of currency then buys fewer goods and services! In order to avoid a recession, the government is pumping more money into the system in an attempt to stimulate the economy. This is causing inflation. Glad that I could help you out.

"Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6]"

http://en.wikipedia.org/wiki/Inflation