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<p>
    The inflation rate measures how much prices in the economy rise from year to year. It is defined as the yearly growth of the overall price level of goods and services.
</p>

<p>
 From now on, inflation will be expressed as an annual percentage rate: 
</p>

<ul>
  <li><b>Example 1:</b> Suppose the annual Sweden inflation rate was 5% for a particular year. 
This means that the overall price level of consumer goods and services went up by 5 percent compared to the previous year. That is a typical bundle of goods and services that costs 1000 dollars at the beginning of a year costs 1050 dollars at the end of that year.</li>
</ul>

<p>
   If the inflation rate is negative, it is referred to as <i>deflation</i>. This means that goods and services become less expensive from the previous period.
 </p>   

    
    <ul>
        <li><b>Example 2:</b> If Sweden's yearly inflation rate were -10%, prices in general would go down by 10 percent.
        This means that the overall price level of consumer goods and services went down by 10 percent compared to the previous year. That is a typical bundle of goods and services that costs 1000 dollars at the beginning of a year costs 900 dollars at the end of that year
        </li>
</ul>
 

<p>
    Now I will ask you to make some forecasts (predictions) about inflation in Sweden. There are no cash rewards for these answers.
</p>



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