Inflation

What is Inflation?

• Money being able to buy more products

• is rising general level of products and it reduces the “production power” of money.

• is rising general level of prices and it reduces the “purchasing power” of money.

• is lowering general level of prices and it raises the “purchasing power” of money.

What are the three causes of Inflation?

• Supply Chain

• Overspending

• Federal Reserve

• Gas Prices

Wage measured by dollars rather than purchasing power.

• Nominal Wage

• Real Wage

• Normal Wage

• Net Wage

Wage adjusted for inflation.

• Nominal Wage

• Real Wage

• Normal Wage

• Net Wage

Who is Hurt by Inflation? Pick 3

• Lenders

• Savers

• Borrowers

• People with fixed incomes

People who are helped by inflation. Pick 2.

• Borrowers

• Lenders

• A business where the price of the product increases faster than the price of resources

• Savers

The percent change in prices from year to year.

• Price Indices

• Inflation Rate

• Market Rate

• GDP Rate

Index numbers assigned to each year that show how prices have changed relative to a specific base year.

• Price Indices

• GDP Rate

• Market Rate

• Inflation Rate

is GDP measured in current prices. It does not account for inflation from year to year.

• Inflation Rate

• Real GDP

• Inflation GDP

• Nominal GDP

is GDP expressed in constant, or unchanging, dollars.

• Inflation Rate

• Inflation GDP

• Nominal GDP

• Real GDP