Imagine money was made of ice cubes. The longer you have them, the more they melt, the less value they have. When you want to buy a hamburger it takes so much ice, but the ice cubes you have keep getting smaller, so the longer you wait the more ice cubes that hamburger will cost.
That’s basically inflation, and the reason this is better than deflation, is you don’t want people hoarding transactional currencies. So governments want their currency to be ever so slightly inflationary, they want the ice melting just a little bit, so it’s better that people use it than hold on to it.
Imagine money was made of ice cubes. The longer you have them, the more they melt, the less value they have. When you want to buy a hamburger it takes so much ice, but the ice cubes you have keep getting smaller, so the longer you wait the more ice cubes that hamburger will cost.
That’s basically inflation, and the reason this is better than deflation, is you don’t want people hoarding transactional currencies. So governments want their currency to be ever so slightly inflationary, they want the ice melting just a little bit, so it’s better that people use it than hold on to it.