Inflation is when the average ​ (a)   of goods and services in the whole economy ​ (b)   over time. This means that, on average, things cost ​ (c)   than they did before.

The opposite of inflation is deflation, which is when the average level of prices ​ (d)   .

When prices are not going up or down very much, the economy is experiencing ​ (e)   .

People often say inflation happens when there are too many ​ (a)   chasing too few ​ (b)   .

How Changing the Money Supply Affects Prices

Inflation can also happen when the government ​ (a)   . If money becomes very common, but goods stay limited, prices rise because each dollar is worth less.

Inflation can happen when:

• The supply of money ​ (b)  

• The supply of goods ​ (c)  

• The demand for ​ (d)   increases

• The demand for money decreases

These ideas connect to basic supply and demand.