ZALIS GLOSSARY: inflation
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The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
Notes:
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.
Most countries' central banks will try to sustain an inflation rate of between 2-3%.