What is the proper definition of inflation?
Inflation is the rate of increase in prices over a given time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
Inflation is a rise in prices, which can be translated as the decline of purchasing power over time. The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over a while. The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.
Inflation can be contrasted with deflation, which occurs when prices decline and purchasing power increases.
