Prices fluctuate in our economy for many reasons but ultimately it results in, inflation. While it is easy to see these changes, it can also be helpful to understand why those price spikes happen.

So, here are some of the causes of inflation, as well as other economic explanations, including what is CPI.

What causes inflation?

Inflation can be caused by many things, such as over-consumption and the economy's inability to meet the demands for those goods and services. If more people are spending money on goods or services that are not readily available, producers and service providers often raise prices. This allows them to not worry about a significant loss in sales.

Inflation also could be caused by a shortage of supply. If there's not enough goods to meet the demand, this could lead to an increase in a manufacturer's or retailer's wholesale costs, which, in turn, would be passed along to consumers through higher retail prices.

Additionally, in certain cases, there is a level of "built-in inflation" within economies, where systems seek to keep inflation at a steady percent. In the U.S., the Fed's target inflation is 2%. Based on this, businesses can increase prices by 2% each year, and the market will still be competitive. Workers can also ask for a 2% wage raise based on these increases, so they can still afford goods and services.

What is inflation?

Inflation is a generalized rise in prices. It can occur across the board in an economy, or it could affect individual products or services, such as gas, rent and groceries.

What is the Inflation Reduction Act? Everything to know about one of Biden's big laws

What is CPI?

CPI stands for the Consumer Price Index. It is a metric used by the US Bureau of Labor Statistics to gauge how much the price of consumer goods and services has changed over time.

It can effectively measure inflation in an urban market and give government officials and everyday citizens alike an idea of the health of the overall economy.

Latest CPI report: Inflation came in hot at 3.5% in March. Fed could delay rate cuts.

Just Curious for more? We've got you covered

USA TODAY is exploring the questions you and others ask every day. From "What is a recession?" to "What is debt?" to "What's the cheapest state to live in?" – we're striving to find answers to the most common questions you ask every day. Head to our Just Curious section to see what else we can answer.

This article originally appeared on USA TODAY: What causes inflation? Here are the reasons why prices are on the rise