What causes inflation?
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In this lesson you will look at different types of inflation and terms associated with this economic concept. You may have heard relatives talk about the good old days when a dollar would buy something. What happened to that dollar? Why won't it buy as much as it did last month or last year? What happened is inflation. In this lesson you will examine various causes and theories of inflation as well as who is responsible for tracking it.
You will use a PowerPoint presentation to learn about the different types of inflation and how they affect your ability to buy goods and services. Also, you will learn about terms associated with inflation, groups affected by inflation, and who tracks changes in the prices of what we buy.
Use the Causes of Inflation Slide Show presentation as your guide guide for making your way through this lesson on the various causes of inflation.
To complete Study Guide #2 you will need to visit these Web sites:
- Part #1: What Goods and Services Does the CPI Cover?
- Part #2: Theory 1: Demand-Pull Inflation - is Inflation Demanding?
- Part #3: Theory 2: Cost-Push Inflation - Is Inflation Pushy?
- Part #4: Theory 3: Quantity Theory of Money - In Theory What Quantity Would You Like?
Inflation has remained in check for much of the past three decades. As a result, prices of goods and services have remained relatively steady. However, we must be on the lookout for factors that can lead to periods of high inflation. Prices of goods and services will rise. The rise may be caused by demand exceeding supply, or because the cost of making goods and services rises and that cost gets passed on to the consumer, or because there is too much money in the economy. Whatever the reason, or combination of reasons, we can expect some inflation in our economy.
Write an essay, comparing and contrasting the causes of inflation. In planning your essay, use the Web sites you used to complete your study guides.