Calculating Inflation Rate

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Inflation is the gradual loss of purchasing power of a given currency. A quantitative estimate of the rate at which purchasing power declines can be reflected in the increase in an economy’s average price level of a basket of selected goods and services over time. When a currency loses value, prices rise and fewer goods and services are purchased. This loss of purchasing power affects the general cost of living for the general public, resulting in a slowing of economic growth.


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