What is meant by inflation and deflation?

Inflation is a persistent rise in the overall cost of goods and services in an economy over time, causing a decrease in the value of money as each unit can purchase fewer goods and services. In contrast, deflation is a sustained decrease in the general price level, which can increase the purchasing power of money but can also harm the economy.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.

 

At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

Similar Questions

Why is there no inflation?

There are several reasons why there may be no inflation in an economy. One possible reason is that there is a lack of demand for g...
More

Why is high inflation bad?

High inflation is bad because it can lead to a decrease in purchasing power, making it more difficult for individuals and business...
More

Why does inflation cause unemployment?

Inflation can cause unemployment because when prices rise, the purchasing power of consumers decreases, leading to less demand for...
More

Ready to get started?

Download our app and start gaining insight into your current and future finances.