Definition of Inflation - Deepstash
Definition of Inflation

Definition of Inflation

Inflation is defined as a situation where money becomes worthless, requiring people to use more money to buy the same things.

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The video, "What is Inflation in 2 Minutes" by Tuttle Twins, explains inflation using the following topics:

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Definition hyper-inflation

Hyperinflation is generally considered to occur when inflation is greater than 1000%. 

With hyperinflation, money loses its value so rapidly that nobody wants to use it as a medium of exchange.

Money Supply & Inflation

Money Supply & Inflation

We can measure the supply of money that exists in the market with main metrics:

  • M1 money supply includes liquid money aka cash. 
  • M2 (which includes M1) includes loans, deposits & market funds. This is mainly made up money. 

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