Module 1

Inflation is a critical economic phenomenon characterized by the sustained increase in prices of goods and services over time. It erodes purchasing power, impacting consumers' ability to afford basic necessities. Central banks often respond by adjusting interest rates to manage inflation levels, striving to maintain economic stability. Understanding the causes of inflation, such as demand-pull and cost-push factors, is essential for policymakers and businesses alike, as it informs strategies to mitigate its effects and promote sustainable growth.