However, inflation can apply more specifically, such as within a specific region (i.e. This means prices across the economy at large rather than prices in a specific sector or region. When policymakers and economists refer to inflation they are typically discussing what is known as “benchmark” inflation. It would, however, refer to the price of milk at all grocers nationwide. For example, inflation would not refer to the price of milk at a specific chain of grocery stores. It does not refer to increases in a specific store or from day to day. Inflation occurs when prices for goods and services go up across an entire sector. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year. But it can also be more narrowly calculated – for certain goods, such as food, or for services, such as a haircut, for example. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. Inflation is the rate of increase in prices over a given period of time.
Inflation refers to prices rising across a market.
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