Results: If economic growth matches the growth of the money supply, inflation should not occur when all else is equal.
Methodology: A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time. When the price level rises, each unit of currency buys fewer goods and services consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
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