Inflation

Vocabulary flashcards covering the definition of inflation, purchasing power, and steps to compute price increases.

Inflation

The continuous increase in the prices of goods and services over time.

Purchasing power of money

The financial ability to buy goods and services, which decreases as prices rise.

Price increase formula

$$\text{Increase} = \text{Original Price} \times \text{Rate of Increase}$$

New price calculation method

The process of determining the final price by adding the price increase to the original price.