Inflation is a term that describes how prices go up over time. There are three main types of inflation:
Demand-Pull Inflation: This happens when more people want to buy things than what is available. When lots of people want something, prices go up.
Cost-Push Inflation: This type occurs when it costs more to make products. When production costs rise, businesses charge higher prices for their goods and services.
Built-In Inflation: This is related to how much workers are paid. When wages go up, companies may increase their prices to keep up with those higher costs.
Each type of inflation affects the economy in its own way. It can change how much people spend, how companies decide to invest, and overall economic health.
Keeping inflation under control is really important for keeping the economy balanced!
Inflation is a term that describes how prices go up over time. There are three main types of inflation:
Demand-Pull Inflation: This happens when more people want to buy things than what is available. When lots of people want something, prices go up.
Cost-Push Inflation: This type occurs when it costs more to make products. When production costs rise, businesses charge higher prices for their goods and services.
Built-In Inflation: This is related to how much workers are paid. When wages go up, companies may increase their prices to keep up with those higher costs.
Each type of inflation affects the economy in its own way. It can change how much people spend, how companies decide to invest, and overall economic health.
Keeping inflation under control is really important for keeping the economy balanced!