Be the first to check out our latest videos on Investopedia Video:

Did you know that inflation is silently eating away at your savings? Learn more about this sneaky financial phenomenon and what causes it.

For more content related to Inflation, check out:

A Primer On Inflation

How To Profit From Inflation

Inflation Tutorial: Introduction
…(read more)

LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Investopedia Video: What Is Inflation?

Inflation is a term that is often thrown around in discussions about the economy, but what exactly does it mean? In a recent video by Investopedia, the concept of inflation is broken down and explained in a way that is easy for anyone to understand.

The video begins by defining inflation as the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. This means that as inflation increases, each unit of currency buys fewer goods and services. This is an important concept to understand as it has a direct impact on our everyday lives.

One of the key causes of inflation is the increase in the money supply. When there is an abundance of money in the economy, consumers have more money to spend, which drives up demand for goods and services. As demand increases, so do prices. This is known as demand-pull inflation. Another cause of inflation is cost-push inflation, which occurs when the cost of production for goods and services increases, leading to higher prices for consumers.

The video also explains that a moderate level of inflation is actually beneficial for the economy. It encourages consumer spending, drives economic growth, and can increase wages. However, if inflation becomes too high, it can lead to a decrease in the value of money, higher interest rates, and a reduction in the purchasing power of consumers.

Furthermore, the video discusses the impact of inflation on different sectors of the economy. For example, investors are affected by inflation as it erodes the real value of their investments. Businesses may also be affected as they have to increase prices to maintain profits, leading to higher costs for consumers.

Overall, the Investopedia video on inflation is a valuable resource for anyone looking to understand the concept and its implications. It breaks down a complex economic concept into simple terms and provides real-world examples to demonstrate the effects of inflation on the economy. Understanding inflation is crucial for making informed financial decisions and planning for the future, and this video is a great starting point for anyone looking to do so.