What is Inflation? An Inflation Explained Video

Video summary

This video explains what inflation is and how you might see it in everyday life, using an example of buying specific items at the grocery store.

Full transcript

In life, you buy things all the time. You probably notice that gradually, the cost of items tends to increase. This is known as inflation. But what exactly does inflation mean? We’ve all gone to the store and seen a price rise. Like with these oranges. So, is that alone a sign of inflation? Well, it depends. Let’s look at another example with these lemons. Prices can go up or down for many reasons. For instance, lemons may go up in cost because of a freeze that reduces supply, but this type of increase is just temporary. Once growing conditions return to normal, the price goes back down to its previous level, showing this was not inflation. Inflation occurs when not just in one category, but across the entire economy prices of many goods and services trend upwards overtime. So now you know, but should you care? Absolutely. Catch our next episode to see why.