Automatic inflation refers to the process where prices of goods and services increase over time without any direct intervention. This phenomenon often occurs due to factors like rising production costs, increased demand, or changes in monetary policy. As a result, the purchasing power of money decreases, meaning consumers can buy less with the same amount of currency. Governments and central banks may implement measures to manage automatic inflation, such as adjusting interest rates or modifying monetary policy. Understanding automatic inflation is crucial for individuals and businesses, as it affects budgeting, savings, and overall economic stability.