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How Money Works: Inflation

April 27, 2012

How Money Works: Inflation

Sunday, 27 February 2011 07:00 AM Edmund Lao
How Money Works: InflationWhat is inflation?

Inflation, by definition, is the loss of purchasing power of a currency. In layman’s terms, it is equivalent to an increase in the price of a commodity over a certain period of time. The easiest way to illustrate inflation is by an example. Suppose one can buy a piece of siopao for P80 this year and the yearly inflation is 10 percent.

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