Inflation

Inflation is a very common business term.  It refers to the increase in the price of the same thing over a time period.  For example, a house today might cost 1 million dollars, but the same house would have only cost $200 thousand dollars 20 years ago.  This is because of inflation.  Tomatoes are more expensive now then they were 50 years ago.  This is also inflation.  The fact that people get higher salaries for the same job then years ago is also inflation.  This is called “wage inflation”.

The opposite of inflation is “deflation”.  This is when the price of something goes down over time.  Computer electronics always go through deflation because of competition and the fact that they keep learning how to make better stuff cheaper.

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