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Inflation refers to the general increase in prices of goods and services in an economy over a period of time, usually measured as a percentage increase in the Consumer Price Index (CPI).

Inflation occurs when the supply of money in an economy exceeds the supply of goods and services, leading to a decrease in the value of money and an increase in the prices of goods and services.

High inflation can have negative effects on an economy, such as reducing purchasing power, reducing the value of savings, and increasing the cost of borrowing.

Central banks and governments often use monetary and fiscal policies to manage inflation and keep it at a stable and manageable level.

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