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Prices don’t stay the same forever — inflation is why a sweet that cost 10 cents years ago might cost a euro today.When prices go up over time so each unit of money buys less.InflationHow much stuff your money can actually buy right now.Purchasing powerThe amount of money needed to cover basic expenses like food, rent and transport.Cost of livingWhen prices go down over time — the opposite of inflation.DeflationThe price ordinary people pay for everyday goods and services.Consumer priceThe big bank that controls a country’s money supply and interest rates.Central bankWhat your money is truly worth after you account for inflation.Real valueInflation means…money becomes more valuableprices rise and money buys lessbanks give you free moneyPurchasing power is…the speed of a transactionhow much your money can actually buya type of credit cardDeflation is the opposite of inflation — it means…prices go upprices go downmoney disappearsThe central bank’s job includes…selling groceriescontrolling money supply and interest ratesprinting passports
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