Inflation: Dollars Losing Value

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InflationDollars Losing Value
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INFLATION Increases in Price Level

• Inflation (on an annual basis) is the percent
  change in the average price level for the year
• Monthly Inflation 100 x (CPI now CPI last
  month)/ CPI last month
• Annualized x 12

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Effects of Inflation

• Effects of inflation
• 10 item after 1 year of inflation _at_
• 2 10.20
• 10 11
• 100 20
• 1000 110
• 10,000 1100
• 1 million
• Formula is P(1 decimal inflation rate)

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U.S. Inflation Since 1960
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• HIGH INFLATION COUNTRIES
• (cia world fact book)
• Uzbekistan 12 2012 est.
• Uganda 19 2012 est.
• Guiena 15 2012 est.
• Venezuela 26 2012 est.
• Sudan 31 2012 est.
• South Sudan 79 2012 est.
• Belarus 59 2012 est.
• Zimbabwe 26,470 2007 est.

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• Factors influencing inflation
• Supply and Demand for Money

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