Inflation Definition: Formula & How to Calculate


Good day fellow students as weeks has passed we have covered inflation.

So what is inflation?

Inflation is when prices go up. Usually, when we talk about inflation we’re talking about general inflation—when the prices for just about everything go up at the same time

In economics, inflation (or less frequently, price inflation) is a general rise in the price level of an economy over a period of time. When the general 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. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time


Inflation is calculated by adding up the prices of thousands of different things and comparing them to the prices for the same goods a month ago. This means there is a list somewhere of the specific things that count towards inflation in your country, and each month someone has to go out and check the prices of all these things.

Can We Help Control Inflation???

So today the focus is can we some how control inflation can we? is this possible?

Everybody hates high prices!!! When prices go up, we can buy less and less. Think of things you like to buy. They may be clothes, a new cell phone, or even a new car. When these prices go up, our money doesn't stretch near as far. In this webquest, you will be exploring inflation, its causes, and what we can do about it.




In this videos it describes what causes inflation and what can be done to solve the problem.

For this webquest, you are going to help our country (and world) attempt to solve the problem of inflation. You will be researching and applying the definition of inflation, determining periods where inflation has been drastic in our country, listing and describing factors which lead to inflation, and deciding if there is anything you can do to help keep inflation down.

Your final products will be a poster to display either in the hall or in the room detailing all of your findings and a short essay explaining what you learned, what your role was in the exploration, and whether or not you believe our country is headed towards a period of massive inflation based on the causes you find!


The “-flation's”: Deflation, Inflation, Stagflation, and Hyperinflation –  the broke intellectual

Step One

Create a Word document to use for your answers. Both you and your partner should have their own document. Save the document as: Inflation your name. (Hint: Be sure to save often!!!)

Step Two

In your groups of two, you will determine a working definition of inflation and deciding whether each instance listed below is an example of inflation. Using the sites listed below, write YOUR OWN definition of inflation. Group member one should use site on and group member two should use site two.

Site 1 -
Site 2 -


Now, using this definition, decide if these topics are examples of inflation. In your document, list the topic and yes or no. If your answer is no, explain why.


1. The price of eggs goes up R20 at Easter.
2. What used to cost you R50 at the grocery store now costs R56.
3. Gas goes up R.34 during the summer traveling months.
4. We are at war with Iran. You cannot buy as much as you used to at Hibbetts.
5. Minimum wage does not go up for 2 years.

Step Three

Using the websites provided, list the years where inflation seems to have been the most drastic in our country. What was happening during our country's history during this time that cause inflation to be steep. List the years and a 4-5 sentence description of what was taking place. Again, group member one use the first site and group member two use the second.

Site 1 -
Site 2 -

Step Four

Now you must find out what factors affect inflation. Using the site listed below, list and describe what factors affect inflation. You must list at least 5 factors. Group member one should list the factor and group member two should use a search engine (ex. to determine why these factors affect inflation. Once all factors have been determined and their reason listed, be sure both partners have this on their Word document.

Inflation factors site:

Step Five

Each group member should think individually about what they can do to help keep inflation down These causes can be something you can do as an individual, what our country can do, or what the world as whole can do to help keep prices down. Each of you should have at least three and no more than five reasons. Type these reasons in your Word document along with a two sentence description of each as to why this would help keep inflation down.

Step Six

Now you and your partner must create a poster which displays your findings and what your suggestions are to help keep inflation down. What is required on the poster and each partner's duties are listed below.

Group member one:
1 - Display a working defintion of "Inflation" which your group generated.
2 - Display a graph which shows the years of high inflation which you discovered in step 3. You may use excel to create this graph.
3 - List 3 of the reasons inflation occurs.

Group member 2:
1 - Label on the graph your partner created what happened during the years of high inflation to cause such economic turns.
2 - List 3 of the reasons inflation occurs.
3 - List 3 things which can be done to help keep inflation down.

 Step Seven

Now you and your partner should return to your workstations to complete the "critical thinking" portion of the assignment. In a one page, MLA formatted paper address the following questions:

1 - What is inflation and what causes it?
2 - What is the biggest reason that you think inflation has occurred in our country's history?
3 - What is the best thing which can be done to keep inflation down?
4 - Based on what you have researched, do you see our country heading towards a period of high inflation? Why or why not?
5 - What was your role in this assignment?

** Print out both your Word document you created in the beginning (Inflation_yourname) and your critical thinking essay. Staple and turn them in.















Initial Research contained on Word Document

Definition is not original; Examples are classified incorrectly; Not all time periods and events are present; No factors of inflation are listed

Definition is mostly original; Half examples are correct; Time periods are listed but without events; Two factors of inflation are listed

Definition is original; Most examples are correct; Time periods are listed with some events present; Three or Four factors of inflation are listed

Definition is original and insightful; All examples are correct: Time periods are listed with excellent descriptions of events; Five or more factors of inflation are listed








Insight into Preventing Inflation on Word Document

No insight is provided

One insightful way to help inflation is listed

Two insightful ways to help inflation are listed

Three or more ways to help inflation are listed









No or not original definition of inflation shown; No graph is shown; Two or less reasons for inflation are listed; Two or fewer ways to help inflation are listed; Poorly organized

Original definition of inflation shown; Simple graph is displayed, but without labels; Three ways to help inflation are listed; Fair Organization

Original definition of inflation shown; Good graph with labels: Four or Five ways to help inflation are listed; Good Organization

Original and insightful definition of inflation is shown; Excellent graph with proper labels; Six ways to help inflation are listed; Superior Organization










Very few parts are evident and no insight is provided

Some parts are evident with little insight

All parts are evident with little insight

All parts are evident with excellent insight provided



#         Score







You have discovered all about inflation and hopefully helped our country help solve its problems. Be sure to be on the lookout for inflation signs and prepare yourself financially when you see these you will now be able to watch the signs of inflation be aware and now you will be able to help you parents be well aware of signs of inflation. 

Teacher Page

Learners are welcome to research and read up on economic effects of inflation and what is can do to the economic growth and development of a economy.

Also students can do more research based on what effect covid 19 had on inflation.

Students are welcome to message or email me to find out about different resources they are able to use or for further explanations based on the research.

Students can message message me at anytime and when i am available ill respond to questions

Contact details 

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For preparation for the next class students should research what effect does inflation have on the growth of an economy.