What "inflation" means in finance

Inflation is the rate at which the general price level of goods and services in an economy is increasing over time. It means that the value of money is decreasing, and consumers need more money to purchase the same goods and services. Inflation is measured by various indices such as the Consumer Price Index (CPI) and the Producer Price Index (PPI) and is a critical economic indicator for policymakers, investors, and businesses. High inflation can lead to a decrease in purchasing power, reduced economic growth, and a decline in the standard of living.