Inflation occurs in a society when there is an expansion of the total amount of money. For example let’s say a society uses gold coins as money.

just expanded it has experienced INFLATION.

money that there aren’t many left for everyone  who wants them. Also, since more people has more money and want apples farmer Jack recognizes that he is able to raise the price of apples for 2 gold coins

.

 pieces can only buy two apples.

Inflation can also occur when governments inflate the money supply. For example, in Ancient Rome, Caesars needed  to find to fund their  massive army and public work projects without reducing their incomes. To do so they would collect the gold and silver coins the people paid for taxes. They would melt the coins down mixing the gold and silver with cheaper less valuable metals such as copper. They would stamp the coin of the picture of the Emperor and authorize the coins as official currency. This process is called as: DEBASEMENT.

with cheaper metals. Now they can have 60 base gold coins. The Roman government is 10 coins richer. They can now pay for 6 centurions or they can pay 5 and keep 10 coins for themselves. Initially, everybody is happy: Soldiers have more money and  buy more goods  from the merchants. The merchants have more money and buy more goods from the manufactures and from the farmers. They manufacturers and farmers are happy because they have more money and so on.

By inflating the money supply, the government has secretly taxed the people, devaluating the people’s money so that the government will become richer.