What is inflation?

2 min read

When the prices of a product and / or service go up, the word always sounds in the air, inflation, however that only one product goes up is not an indication to say that a country is experiencing inflation, in any case we will try to explain in this article, what is inflation, how is it produced and what are its immediate effects.

What is inflation? – Online legality – WebMediums

What is inflation in economics?

First, inflation is the sustained rise in prices of goods and services in their entirety above the target range, wages and a long period of time.

In short, if only meat rises, one could not speak of inflation, but rather of an increase in meat prices, if only the school fee rises, it is not inflation either, there is some reason that this price rose.

Now if all the prices of the basic food basket go up, or the highest percentage, and to this we add basic care services such as transportation, education and health, then we are facing inflation.

Governments generally set goals, inflation is not bad at all, since it is one of the pillars of Western capitalism, it is necessary to achieve profitability and also because of the interest rate on loans, especially long-term loans such as mortgages.

These goals are generally set or projected at less than two digits, when we speak of inflation below 10% then it is relatively controlled.

How to know if I lost or gained money with inflation?

Easy, if you have a fixed-term savings account and the interest is less than the inflation rate then you made money, otherwise you lost.

What to do in the face of inflation in my country?

You have some options only to mitigate the effects since you do not have the power to generate an economic change at the national level, so you could well stop using some services, spend less or simply work more to earn the same as before.

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