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9 Common Effects of Inflation

9 Common Effects of Inflation

Inflation is a decrease in the purchasing power of currency due to a rise in prices across the economy. Such a price change could conceivably have resulted from a surge in the popularity of coffee, or price pooling by a cartel of coffee producers, or years of devastating drought/flooding/conflict in a key coffee-growing region. Inflation requires prices to rise across a "basket" of goods and services, such as the one that comprises the most common measure of price changes, the consumer price index (CPI).