What is inflation?
Inflation is an overall increase in the prices of goods or services in an economy. Over time, currency loses value and it doesn’t have as much purchasing power as it once did. In other words, whatever a dollar can buy is reduced over time. Inflation can occur for a variety of reasons, like higher wages, lower interest rates, supply chain issues, or broader issues in the global economy.
For example, assume a certain item cost $1.50 in 1920. After accounting for inflation, that same item would cost $10.50 in 1970 and $20.50 in 2021.
