What is Inflation?

Inflation happens when money loses its value over time, making prices go up. This can happen in three main ways: demand-pull inflation (when people want more goods than are available), cost-push inflation (when it costs more to make products), and built-in inflation (when wages go up to keep up with rising prices, which can make prices rise even more). Inflation affects everyday life by making things more expensive, leading to discussions about how to manage wages and prices. Money Kids: Why is Everything More Expensive part 1