Imagine you have a piggy bank with $100. Every year, it gets more money, that's like inflation. But sometimes the amount of new money added is way more or less than expected, which makes people say, 'Wait, what? That’s not how it worked last time!' Inflation rates tell us how much prices go up each year. When they're different from what we think, it surprises us, kind of like when your favorite ice cream flavor disappears and a weird new one shows up instead.
Examples
- A pizza used to cost $10 last year, now it's $12. That’s inflation, but when you expected $11, it feels surprising.
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See also
- Why Do Inflation Rates Go Up When Everyone Is Wasting Money?
- Why Do Inflation and Interest Rates Play Tag?
- Why Do Inflation and Interest Rates Go Hand-in-Hand?
- What are inflation rises?
- Why Do Inflation Rates Change So Suddeny?