6 Things To Know About Inflation
By Jake and Adriana
#1. What is Inflation?
Inflation is a situation where something cost more then it used to cost. As inflation rises every dollar you own buys less percentage of a good or service. People think that inflation is going to expand and the economy is going to crash.
#2. Causes of Inflation.
The increase of general prices over time.
3 main causes of inflation: Demand and Pull Inflation , Cost Push Inflation, and Expansion of Money supply.
Demand and pull- the most common and when demand for a good or service increases so much that it outstrips the supply.
Cost Push- A shortage of supply combined with enough demand to allow the produce to continue to raise prices.
Expansion of Money supply: An over expansion of money supply. The prices of everything increase while the supply and demand stay the same
#3. How to Profit from Inflation
People that sell goods are benefiting the most from inflation. They increase their prices and make more money.
#4 The Unites States and Inflation
The U.S inflation increases 1.5%, It has increased through the past few years. Gas has gone down in price from 1.7% to 1.0% and food prices went up to 1.1% to 1.8%. U.S inflation over the past 12 months eased as consumer prices in March retreated for the first time in months.
#5. Dangers of Inflation
Inflation causes deflation. Deflation is prices declining over time after inflation, which can lead to countries going into debt. The value of a dollar can go down when deflation happens.
#6. How inflation causes unemployment.
When inflation happens unemployment percentage raises. In the United States the Federal Reserve is striving to get inflation up to 2% in order to reduce unemployment.