LET’S TALK MONEY WORD OF THE DAY JANUARY 10TH

SHONDA MILESWWW.SHONDAMILES.COM

INFLATION

• A GENERAL INCREASE IN PRICES AND FALL IN THE PURCHASING VALUE OF MONEY.• WHEN A DOLLAR BUYS LESS THAN YOU WOULD EXPECT IT TO, WE CALL THAT INFLATION.

INFLATION IS CAUSED BY A VARIETY OF FACTORS, BUT MOST OF THEM ARE RELATED TO INTEREST AND DEBT. WHEN THE FEDERAL RESERVE BANK RAISES INTEREST RATES, IT CAUSES THE DOLLAR TO INFLATE. THERE IS MORE IN THE SYSTEM, SO EVERY DOLLAR IS WORTH JUST A LITTLE BIT LESS.

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INFLATION

• A PERSISTENT, SUBSTANTIAL RISE IN THE GENERAL LEVEL OF PRICES RELATED TO AN INCREASE IN THE VOLUME OF MONEY AND RESULTING IN THE LOSS OF VALUE OF CURRENCY

• INFLATION IS THE RATE AT WHICH THE GENERAL LEVEL OF PRICES FOR GOODS AND SERVICES IS RISING AND, CONSEQUENTLY, THE PURCHASING POWER OF CURRENCY IS FALLING. CENTRAL BANKS ATTEMPT TO LIMIT INFLATION, AND AVOID DEFLATION, IN ORDER TO KEEP THE ECONOMY RUNNING SMOOTHLY.

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• AS A RESULT OF INFLATION, THE PURCHASING POWER OF A UNIT OF CURRENCY FALLS.

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