Motorcycle finance calculator
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In regard of what are the causes of inflation, there are numerous factors that determine or contribute to its growth. The general rule says that when inflation increases, the purchasing power decreases. Since inflation is a sustained increase in the general prices that means when it is at high levels, the money simply melts. What is the relation between inflation and money? The purchase power is directly related to it, as such for instance let's assume, if in 2010 at a price of $20 you could purchase a book, today the same product costs 25 dollars, which means that your 2010's 20 dollars can only buy 80% of the same book. This economic phenomenon affects directly each of us, as the higher the inflation is the worst things can get for all of us. For instance 2% inflation rate means that comparing to the previous year, the prices for specific items went up with 2% ( e.g for a book of 20 dollars in year one, an inflation rate of 2% in second year means that the new price of the book will be 20+20*2/100=20.4 dollars).
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This figure is measured as an annual percentage increase. The opposite of the inflation is called deflation which shows a price decrease. It is a macroeconomic indicator that measures the variation of the prices of a basket of goods in a specific time period. In the most common terms the inflation can be defined as an increase in the price of the most representative goods and services within specific economy. What is inflation and how does it affect us?