Inflation
A sustained increase in the general price level of goods and services
Real World Example
During the Global Age from 1420 to 1750, inflation became significant as European nations, like Spain, brought vast amounts of silver from the Americas, causing prices to rise. This influx of silver led to what is known as the Price Revolution, where the increased money supply meant that more currency was chasing the same amount of goods, thus raising prices. It was important because it affected economies in Europe, making goods more expensive and impacting the wealth and power of nations. Inflation still matters today because it affects the value of money and the cost of living. For example, if inflation causes food prices to rise, a family might struggle to afford groceries, impacting their daily life and financial planning.
