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Rate of Inflation
Definition: The percentage increase in the general level of prices over a given time period, usually one year.
Additional Info: As inflation increases, purchasing power decreases. A certain amount of inflation is regarded as healthy economic growth. Central banks and governments often set inflationary targets (2.0% per anum is the target set by the ECB and BoE) and monetary policy (specifically interest rates) is adjusted accordingly to meet this goal. Related Terms: Aggregate Demand - Aggregate Supply
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