Inflation

In general, what happens to money that you have saved in a jar in your closet for 20 years?

• I will be able to buy more with it than I could when I saved it.

• I will be able to buy less with it than I could when I saved it.

• It's the same amount of money so I will be able to buy the same with it than when I saved it.

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What is the biggest problem with this statement?

"I will be getting a pension of $1500 a month. This is enough to cover my expenses now, so I will be Ok for the rest of my life"

• It does not account for inflation.

• This person might lose their pension.

• This person should be saving their money

Why is the minimum wage now higher than the minimum wage when your dad was your age?

• Because more people go to college

• Because the population has increased

• Because price inflation has caused wage inflation

• Employers are nicer now than they used to be

High inflation is good for the economy.

• True

• False

Deflation (when prices go down) is good for the economy.

• True

• False

When someone says "in today's dollars", they are...

• Talking about money that they earned today.

• Adjusting for inflation

• Complaining about taxes

A small level of inflation is good for the economy.

• True

• False

what is the challenge of inflation when it comes to long term saving?

• You need to find a way to make your money grow so that hopefully it grows faster than inflation.

• Since prices keep going up, you are out of luck no matter what you do.

• Saving your money in a jar is the safest thing because you can't lose it.

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If you currently pay $130 per week on food for yourself, how much would you expect to pay 35 years from now if inflation stays at 2%?

• $130

• $260

• $630.50

• $4550

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If you currently pay $130 per week on food for yourself, how much would you expect to pay 35 years from now if inflation stays at 5%?

• $130

• $650

• $717.60

• $4550

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