Meaning of Word
Inflation refers to the sustained increase in the general price level of goods and services in an economy over a period, leading to a decrease in purchasing power.
Definitions and Meaning in English
- Economic Definition: A continuous rise in the prices of goods and services, reducing the value of money.
- General Definition: The act of inflating or being inflated, such as filling something with air or gas.
- Astronomy: A rapid expansion of the universe immediately after the Big Bang.
History and Origin
The word inflation originates from the Latin inflatio, meaning “to blow into” or “to puff up.”
- First used in the 14th century in the context of physical expansion.
- In economic terms, it began to be widely used in the late 19th century, especially during discussions of monetary policies and price increases.
Detailed Explanation
In economics, inflation measures how the average price level of goods and services increases over time, usually expressed as a percentage. It erodes purchasing power, meaning the same amount of money buys fewer goods and services. Inflation can be caused by factors like increased demand (demand-pull inflation), higher production costs (cost-push inflation), or excessive money supply in the economy. While moderate inflation is considered normal and can stimulate growth, hyperinflation or uncontrolled inflation can lead to economic instability.
Example Sentences
- The government implemented policies to control rising inflation rates.
- High inflation makes it harder for people to afford basic necessities.
- During the 1970s, many countries experienced severe inflation.
- Inflation caused the price of housing to double in just five years.
- Low inflation rates are often a sign of economic stability.
- The central bank raised interest rates to combat inflation.
- Inflation reduced the value of his savings over time.
- Rapid inflation can destabilize a country’s economy and lead to protests.
- Economists predict a slight rise in inflation due to higher fuel prices.
Synonyms with Short Explanation
- Price increase – The general rise in the cost of goods and services.
- Cost escalation – A gradual or rapid rise in expenses or prices.
- Rising prices – The upward trend of prices in an economy.
- Devaluation – The reduction in the purchasing power of money.
- Economic growth (contextual) – Sometimes associated with moderate inflation in growing economies.
Related Words with Short Explanation
- Deflation – The opposite of inflation, where prices decrease over time.
- Hyperinflation – Extremely rapid and uncontrollable inflation.
- Stagflation – A situation with high inflation, slow economic growth, and high unemployment.
- Purchasing power – The value of money in terms of the goods and services it can buy.
- Monetary policy – Strategies used by central banks to control inflation and stabilize the economy.
More Matches with Short Explanation
- Demand-pull inflation – Inflation caused by high consumer demand.
- Cost-push inflation – Inflation driven by rising production costs.
- Core inflation – Inflation excluding volatile items like food and energy prices.
- Inflation rate – The percentage change in the price index over a specific period.
- Inflationary spiral – A cycle where rising prices lead to higher wages, causing further inflation.
Antonyms
- Deflation – A decrease in the general price level of goods and services.
- Stability – A situation where prices remain steady over time.
- Disinflation – A slowdown in the rate of inflation.
- Price drop – A reduction in the cost of goods and services.
- Economic equilibrium – A balanced state with stable prices.
