Government Economic Objectives: Low Inflation
Inflation changes the value of money over time — it lowers it.
One of the government’s economic objectives is to keep inflation low and stable. So, money does not lose its value too fast. The government will usually set the target inflation rate and try to keep it at around 2% annual growth.
The spending power of money changes over time. The spending power of USD$100 is all the goods and services that can be bought at a certain point in time with that USD$100. If USD$100 buys fewer goods and services this year than it did last year, then the value of money has fallen. And this was caused by inflation. If USD$100 buys more goods and services this year than it did last year, then the value of money has increased, and there is no inflation.