The increase in the supply of money generally is one of the leading causes of inflation. And monetary policy that results in the pumping of money into an economy is called quantitative easing (QE). QE sees the central bank of a country or region printing, lending or giving away money to support growth.
Inflation is the decline in purchasing power of a given currency over time. It is usually estimated based on the increase in the average price of a basket of goods and services in the economy over a period of time.
Effectively, it refers to the same dollar value in currency being able to buy fewer goods or services over time. A commonly used inflation index is the Consumer Price Index, and it is often referred to in the news when there are reports on the economy of a country, region, or even the global economy.
