1. By: Emily Young Hunter Carlen Shea Eichensehr
Inflation
By: Emily Young
Hunter Carlen
Shea Eichensehr

2. What do you think inflation means?
apply it to your own life

3. What is inflation?
Inflation- is a rise in the general level of prices.
~High rates of inflations makes it harder on families to pay bills and business activities decreases.
~Interest rates on loans can increase, which discourages borrowing and spending by business.
~Goods and services prices increase.
~Inflation is a negative for the economy and can cause panic.

4. Causes and Effects Causes:
Main cause of Inflation: when the level of currency of a country exceeds the level of production
Causes:
rapid wage increase (bonuses and minimum wage increase)
rising material costs
rising import prices
higher taxes
declining productivity
printing more money
rising home prices

5. Causes and Effects Cont.
value of money reduces
stock market crashes
cost of doing business
cost of living
economic recession
unemployment rises

6. Inflation Example
If the inflation rate is 4%, then gum will increase from one dollar to $1.04.

7. Wage-PRice Spiral
Theory that suggests that rising wages raises disposable income (money after taxes) causing a rise in demand for supply, causing prices to raise.

8. Hyperinflation
Out of control inflation. Defined when prices raise 50 cents per month or more.

9. Purchasing Power
is the number of goods or services that can be purchased with a unit of currency.

10. Consumer Price Index
A measure (index) of charges in the average price of consumer goods and services.

11. Consumer Price Index What does it measure?
-Average change in the prices paid of goods and services and is divided into eight major groups:
Food and Beverages
Housing
Apparel
Transportation
Medical Care
Recreation
Education and communication
Other

12. Inflation video

13. open inflation
The rate where which the prices of consumer goods rise consistently.

14. stagflation & reflation
combination of inflation
slow economic growth and high unemployment
worst kind of inflation
an attempt to raise the general level of prices to counteract deflationary pressures

15. Suppressed inflation
Existing inflation disguised by government price controls or other interferences in the economy such as subsidies.

16. galloping inflation
very rapid
almost impossible to reduce

17. creeping inflation
where the inflation of a nation increases gradually, but continually, over time.

18. Matching Game
efile=7173

19. Case Study 2008 Global Recession: -New inflation policies were made.
-U.S. Federal Reserve kept interest rates at nearly zero to promote lending.

20. Cites http://www.investopedia.com/terms/w/wage-price-spiral.asp