Inflation refers to the general increase in prices over time, which reduces the purchasing power of money. Moderate infl is consi normal i a growing eco, and cen banks usu aim t keep i within a tar range. Wh inflation ri too qui, however, house find i harder t afford ever necessities. Cen banks of respond b raising inte rates, wh makes borr more expe and sl spending. Balancing growth and price stability remains a central challenge of economic policy.