Defination of Inflation?

Answer 1

It is the rise in average aggregate prices.

Inflation is primarily a monetary effect, prices rise to fit the amount of money in the system. A 5% increase in the real supply of money results in a 5% increase in prices, approximately and in most circumstances. There are specific cases where this does not occur, but this is the general case.

Answer 2

A very simplistic answer is, inflation is the rate at which the price of goods and services changes over time. If you have to pay $1.05 a year from now to buy what you could buy for $1.00 today, there's a 5% annual inflation rate.

If prices go down over time (as in a recession or depression), you have deflation.

Answer 3

Inflation is the economic condition during which prices of goods are rising because the purchasing power of money is falling. It is more of a loss in the confidence in money rather than a rise in the demand for products relative to the supply.