Inflation is when prices go up, and interest rates are like the cost of borrowing money. If inflation is high, sometimes interest rates go up, but it can feel confusing! Imagine you're buying candy every week. If the candy gets more expensive, you might need to save more or borrow more money. That's how inflation and interest rates work together, like a game with rules that change over time.
Examples
- Sometimes people stop buying new toys because it’s too pricey now.
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Categories: Economics · inflation,interest rates,central bank