inflation i6 the general increase in the grices of acods And Services im On Rconowy over tin® Tt veduces the QUEchAsing Roney of money, m@Aning that a unit of currency cam louy less than before. Inflation is usually measured loy the Consumer Qrice inden (CPLY, which Tracks the changes in the grices of a basket of Selected goods And Services Lnf lation can have loth positive And negative effects on the econoeny And the people. Some of the effects are: Loflation can stimulate economic growth And employment when it iS moderate nd expected, OS it encodwages Consumers to Spend And businesses to invest loefore grices vise further Inflation con distort the relative prices of goods And Services, leading to ime€ficient Allocation of resources And misinformed decisions bby Consumers And producers. Tafiation caw create uecertainty and iastabiity ia the ecomomy, especiaiy when this har and onpeedictatete, as tt veduces comPiaence and discouraaRS Tomarte THFUtIOR, WHICH TS TE SEMENOT WCVECSE Ww THE PRICES OF Spods Und SERVICES WO Demawd=quIr fiotion: This occUes whan the dewand for qpods Ona SeRTICe RxCeeAS ThE SURPY, eading TO higher PRES. THS COM HAPRER whem i BROW, TORTURES HOVE CHORE CORE Od SPERAIAG PORES, OF WHER THERE IST HOrTUGE OF Qo0as AVE TO ROTUCOI dISUSTENS, WONS, OF TOBE aiSURTION’ Cost-gush inflation: This occurs when the costs of production increase, Such aS WOALS, Kaw materials, energy, oF Axes, And grodUCerS RASS on the higher Costs to Consumers im the form of higher ices. This COn hOQREn when There iS a vise in