Why Do We Have Inflation?

Inflation is when prices go up. Imagine you have a piggy bank with $10, and it buys you 10 candies. A year later, that same $10 only buys you 5 candies because the price of each candy doubled. That’s inflation, like when money loses its power over time.

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Examples

Your favorite pizza used to be $10, but now it's $12.
Your allowance is still $10 a week, but you can't buy as much candy anymore.
The same toy that cost $5 last year now costs $7.

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Categories: Economics · inflation,money,economy