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Inflation

Inflation

Is Inflation Accurately Measured in the Contemporary Economy?

There is a universal problem in every economy in the world. It is a very big problem that
is costly and very hard to forecast.  Just what is this economic nightmare?  The answer is
inflation.  It is the most significant factor or risk to economic growth.  Here in the United States,
we haven’t had much inflation lately, but some wonder if inflation is being accurately measured
in today’s contemporary Economy.  This is a question I will attempt to answer in this paper.
	First off, what exactly is inflation?  Inflation is a process in which the price level is rising
and money is losing value.  Inflation does not occur when you have a one-time jump in price, but
rather an ongoing process where the price level is getting higher and higher over a period of time. 
When this happens, the twelve pack of Coca-Cola that you could once buy with your $3.00, can
now only buy you a 6 pack because the value of your $3.00 went down.  This is one of the effects
of inflation.
	Inflation can result from either an increase in aggregate demand or a decrease in aggregate
supply.  When this happens we

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