Inflation in Canada
Recessions and unemployment are trouble enough, but many people in the modern world see a danger in too much prosperity. The danger is inflation. Inflation is defined as an increase in the average price level in the economy. The amount of inflation is measured by the consumer price index (CPI) and producer price indexes (PPI). As inflation goes up, there is a decline in the purchasing power of money (Investopedia, 2002, P.2).
Thinking in terms of supply and demand, price inflation could be caused in one or both of two ways.…
