Economics Inflation Questions
The impact of inflation on energy prices is generally an increase in energy prices. Inflation erodes the purchasing power of money, causing the prices of goods and services to rise over time. As energy is a fundamental input in the production of goods and services, its price tends to increase along with inflation. This can be due to various factors such as increased production costs, higher demand for energy, or changes in supply and demand dynamics. Additionally, inflation can also affect the prices of energy-related commodities, such as oil and gas, which further contribute to the overall increase in energy prices.