Back to Basics
00:00 What is inflation?
00:30 Inflation explained
01:43 Understanding inflation
02:57 How is inflation measured?
05:00 Causes of inflation
05:52 Is inflation good or bad?
Have you noticed prices have steadily been increasing for everyday items?
Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to maintain low, stable inflation rates in order to support strong economic growth.
Inflation is measured by the percentage change in the price level of a basket of goods and services over time. If the inflation rate is 2%, it means that the basket of goods and services that costs $100 this year will cost $102 next year.
It’s important to note that a small amount of inflation is generally considered to be a good thing, as it can help stimulate economic growth. However, very high levels of inflation can be harmful to an economy and lead to economic instability.
Central banks try to keep inflation low and stable by using tools such as setting interest rates and controlling the money supply. We have seen interest rate rises in 2022 as well as a significant amount of new money supply.
Collective Shift Resource: What is Inflation?
In light of recent events in the crypto industry, going back to basics can have compounding effects on your cryptocurrency journey.
We’re currently in the process of updating our Beginner Resources—keep an eye out for greater educational content into 2023!