what is inflation?

Fundamentally, inflation is the rising in prices of goods
that are bought and sold. Inflation of a national currency is caused by an increase in
volume of a nation's monetary supply without an in demand for that currency. Inflation
has both positive and negative consequences. Because inflation (or its rate thereof)
directly impacts the exchange rate of a given currency against other currencies around
the world, goods produced within countries with favorable rates of inflation (in
comparison to other currencies) are more competitive on the global market. China has
been accused of utilizing this strategy to make its goods more competitive around the
world.