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Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is decreasing. This increase in prices is generally measured by the Consumer Price Index (CPI) and can be caused by various factors such as an increase in the money supply, a decrease in the supply of goods, and an increase in demand. Inflation can have negative effects on an economy, including decreased investment, reduced consumer spending, and reduced economic growth. Central banks often aim to control inflation through monetary policy measures, such as adjusting interest rates or controlling the money supply.
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