Date post: | 18-Jan-2018 |
Category: |
Documents |
Upload: | amanda-newman |
View: | 228 times |
Download: | 0 times |
Life With Inflation
To identify who is hurt and helped by inflation
Inflation General increase in the price level of goods
Inflation General increase in the price level of goods
However, this is an estimate, as some goods could actually decrease, but others rise
Consumer Price Index (CPI) Tool for measuring inflation
Consumer Price Index (CPI) Tool for measuring inflation
Survey 21,000 stores then compare them to a base year
Consumer Price Index (CPI) Tool for measuring inflation
Survey 21,000 stores then compare them to a base yearThe base year is given an index value of 100 and the
this year is totaled and compared
Consumer Price Index (CPI) Tool for measuring inflation
Survey 21,000 stores then compare them to a base yearThe base year is given an index value of 100 and the
this year is totaled and comparedIf this year receives a 115, then inflation is 15%
Types of Inflation Demand-Pull Inflation – there is a shortage of
goods (high demand)
Types of Inflation Demand-Pull Inflation – there is a shortage of
goods (high demand)This is a good sign that the economy is doing well
Types of Inflation Demand-Pull Inflation – there is a shortage of
goods (high demand)This is a good sign that the economy is doing wellOften times, this inflation is found in times of war
Types of Inflation Demand-Pull Inflation – there is a shortage of
goods (high demand)This is a good sign that the economy is doing wellOften times, this inflation is found in times of war
Cost-Push Inflation – prices go up b/c of an increase in the costs of production
Who Wins? Who Loses?
Who Wins? Who Loses? Hurt:
Who Wins? Who Loses? Hurt:
Those with a fixed income
Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys less
Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys lessBusiness activity
Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys lessBusiness activity
People may buy less
Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys lessBusiness activity
People may buy lessIf inflation goes up, so do interest rates, meaning businesses
will take out fewer loans
Who Wins? Who Loses? Helped:
Who Wins? Who Loses? Helped:
Debtors, people who have borrowed money
Who Wins? Who Loses? Helped:
Debtors, people who have borrowed moneyHigher inflation means higher wages which means that they
can pay off previous loans easier