Inflation
A sustained increase in the general price level of goods and services
Real World Example
In the 1780s, after the American Revolution, the new United States faced inflation due to printing too much money to pay for war expenses. This devalued currency made it hard for people to buy goods, causing economic hardship and unrest. Inflation was a big issue when forming a government because it showed the need for a stable national currency and financial system, leading to the creation of the U.S. Constitution and the First Bank of the United States. Today, inflation still affects us by reducing the purchasing power of money, meaning people can buy less with the same amount of cash. For example, if inflation increases, you might notice your weekly grocery bill rising even though you're buying the same items, which can strain family budgets.
