Something interesting I never knew about until today is that we don't want the dollar to have too much power, and we also don't want the dollar to have enough power.
Definition of Inflation:
"Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As Inflation rises, every dollar you own buys a smaller percentage of a good or service."
What happens when Inflation rates go up, is that the purchasing power if the dollar goes down. Something you would be able to buy for $1.00 this year, could cost $1.05 next year if the annual Inflation Rate went up 5%.
The opposite of Inflation is Deflation which is the decrease in the power of the dollar. When you see the worth of the dollar fall, you will also see rising rates in unemployment which if lasting long enough can cause an economic depression.
Sources:
http://www.investopedia.com/university/inflation/inflation1.asp
http://www.investopedia.com/terms/d/deflation.asp