Inflation lesson 9

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The document discusses inflation, including its definition, causes, and effects. Inflation is defined as a rise in the general price level over time. It is measured as an annual percentage increase by comparing the consumer price index from one year to the previous year. Common causes of inflation include demand-pull factors, government deficits, cost-push pressures like increased wages, and excessive monetary growth. Effects of inflation are a decreased purchasing power of currency, economic instability as spending habits change, speculation, and shifts in the distribution of income between borrowers and lenders.

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