Inflation is a term that most of us have come across at some point in our lives. It refers to the increase in the general price level of goods and services in an economy over a period of time. While inflation is a normal economic occurrence, its effects can have a significant impact on consumers and their spending habits.

One of the ways in which inflation affects consumer spending habits is through a decrease in purchasing power. When the prices of goods and services rise due to inflation, consumers find that their money does not go as far as it used to. This can lead to a reduction in discretionary spending as consumers prioritize essential items over non-essential purchases.

Inflation also impacts consumer behavior by influencing saving and investment decisions. As the cost of living increases, consumers may feel the need to save more of their income to account for … More >>>