Inflation: Inflation refers to the sustained increase in price levels over time. It erodes the purchasing power of money as each unit becomes worth less.
Deflation: Deflation is the opposite of inflation and represents a decrease in general price levels. It usually occurs during periods of economic decline.
Consumer Price Index (CPI): The CPI is a measure that tracks changes in the average prices paid by urban consumers for a market basket of consumer goods and services. It is often used as an indicator of inflation or deflation within an economy.