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Inflation is the rate at which the general level of prices for goods and services rises over time, leading to a decrease in purchasing power. While mild inflation is considered a normal part of a growing economy, high or unpredictable inflation can create serious challenges for consumers, businesses, and policymakers.
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There are two main types of inflation: demand-pull and cost-push. Demand-pull inflation occurs when demand for goods and services exceeds supply, often during economic booms or periods of strong consumer confidence. Cost-push inflation arises when production costs (such as wages or raw materials) increase, forcing businesses to raise prices to maintain profit margins.
