What happens during inflation?

Inflation is a phenomenon where the general level of prices for goods and services in an economy increases over time, resulting in a decrease in the purchasing power of currency. During inflation, the value of money decreases as prices for goods and services increase. This can have several effects on the economy, including a reduction in the real value of savings and investments, a rise in the cost of borrowing, and a decrease in the purchasing power of consumers. Inflation can be caused by a variety of factors, including increases in the money supply, changes in supply and demand for goods and services, and government policies. High levels of inflation can be harmful to an economy, leading to reduced economic growth, higher unemployment, and other negative consequences.