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This article is about a rise in the general price level. For the expansion of the early universe, see Inflation (cosmology). For other uses, see Inflation (disambiguation). In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. [1] [2] [3] [4] When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. [5] [6] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time. [7] The opposite of inflation is deflation (negative inflation rate). Inflation affects economies in various positive and negative ways. The negative effects of inflation include an increase in the opportunity cost of holding mon...