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In economics, inflation is a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.
The currency depreciation was seen in Venezuela when the bolivar's purchasing power dropped so low that a person sold sculptures made out of money because as raw material it was worth more than a bill.
Two big reasons cause inflation; one is the shortage of supply and another is an increase in demand. If right now the pencils we use are in balance with the companies’ production then there would be no sum rise in the prices of the pencils but the cost will substantially increase or decrease if either the demand is not met or the supply is more than what is needed.
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