1、 https:/crsreports.congress.gov Updated November 22, 2021Introduction to U.S. Economy: InflationWhat Is Inflation? Inflation is defined as a general increase in the price of goods and services across the economy, or, in other words, a general decrease in the value of money. Conversely, deflation is
2、a general decrease in the price of goods and services across the economy, or a general increase in the value of money. As inflation occurs, individuals can purchase fewer goods and services with the same amount of money. For this reason, an individual would need about $326 in 2021 to purchase the sa
3、me amount of goods and services as $100 would have purchased in 1980. Measures of inflation are used to adjust money figures to keep purchasing power constant over time, allowing for more accurate comparisons across disparate time periods. Monetary figures that have been adjusted for inflation are r
4、eferred to as real, and non-inflation-adjusted figures are referred to as nominal. Measuring Inflation The rate of inflation can be measured by observing changes in the average price of a consistent set of goods and services, often referred to as a market basket. Inflation is generally measured usin
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