life with inflation to identify who is hurt and helped by inflation
DESCRIPTION
Inflation General increase in the price level of goods However, this is an estimate, as some goods could actually decrease, but others riseTRANSCRIPT
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Life With Inflation
To identify who is hurt and helped by inflation
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Inflation General increase in the price level of goods
![Page 3: Life With Inflation To identify who is hurt and helped by inflation](https://reader035.vdocument.in/reader035/viewer/2022062223/5a4d1b897f8b9ab0599bdfbd/html5/thumbnails/3.jpg)
Inflation General increase in the price level of goods
However, this is an estimate, as some goods could actually decrease, but others rise
![Page 4: Life With Inflation To identify who is hurt and helped by inflation](https://reader035.vdocument.in/reader035/viewer/2022062223/5a4d1b897f8b9ab0599bdfbd/html5/thumbnails/4.jpg)
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Consumer Price Index (CPI) Tool for measuring inflation
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Consumer Price Index (CPI) Tool for measuring inflation
Survey 21,000 stores then compare them to a base year
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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
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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%
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Types of Inflation Demand-Pull Inflation – there is a shortage of
goods (high demand)
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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
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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
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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
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Who Wins? Who Loses?
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Who Wins? Who Loses? Hurt:
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Who Wins? Who Loses? Hurt:
Those with a fixed income
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Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
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Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys less
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Who Wins? Who Loses? Hurt:
Those with a fixed incomeCreditors, or those who have loaned money
When repaid a loan, their $ buys lessBusiness activity
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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
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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
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Who Wins? Who Loses? Helped:
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Who Wins? Who Loses? Helped:
Debtors, people who have borrowed money
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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
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