(1) Inflation is generally defined as: under the credit currency system, the amount of money in circulation exceeds the actual needs of the economy, which leads to the devaluation of the currency and the overall and sustained rise of the price level-in more popular language, it means that the price level in a given economy generally continues to increase in a given period, which leads to the continuous decline of the purchasing power of money.

(2) If there is inflation, prices will rise, and the consumption of ordinary people will become higher, which will lead to a decline in the overall consumption level of society, which is not conducive to social development.

(3) Raising interest rates by banks means that banks will urge people to deposit extra money in banks by raising interest rates. At this time, the circulation of money in the market will decrease, and the price will fall in time, thus alleviating inflation.