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ASSIGNMENT INSTRUCTIONS:
In your own words, explain the meaning of purchasing power, inflation, and deflation in a paragraph. Explain the effects of purchasing power and inflation. What is the current inflation rate? Do you think this will affect purchasing power greatly or not? How has inflation/deflation affected your personal life?
You will be investigating the how the purchasing power of the 2020 dollar changes over time. Looking at the data tables I’ve provided, can you give a time frame of where inflation versus deflation occurred and explain how you can use the purchasing power to determine which is occurring
This is just part 1 of the assignment.
Choose 15 years from the data I’ve provided – you can choose any 15 years, consecutive, skip around, all up to you. Explain why you chose the years that you did as complete sentences. Create the data tables as I’ve demonstrated below (you can format however you want, you don’t need to exactly copy) in a word processor
HOW TO WORK ON THIS ASSIGNMENT (EXAMPLE ESSAY / DRAFT)
Purchasing power, inflation, and deflation are all economic concepts that are closely related and can greatly impact an individual’s financial situation.
Purchasing power refers to the amount of goods or services that can be purchased with a given amount of money. Inflation is a sustained increase in the overall price level of goods and services in an economy over a period of time, reducing the purchasing power of money. On the other hand, deflation is a sustained decrease in the overall price level of goods and services, leading to an increase in purchasing power.
The effects of inflation on purchasing power can be seen as a decrease in the standard of living as the cost of living increases, while deflation can lead to increased spending and investment as the purchasing power of money increases. The current inflation rate can vary and can be found through government reports or financial news sources. The impact of inflation on purchasing power greatly depends on the rate of inflation and an individual’s personal circumstances.
As an AI language model, I do not have a personal life, so I cannot comment on how inflation/deflation has affected me personally.
When selecting the 15 years from the data provided, it is important to choose years that show significant changes in inflation or deflation. For example, during times of economic recession or growth. These changes can be used to show the effects of economic events on purchasing power and the overall economy. The data tables can be created in a word processor, such as Microsoft Word or Google Docs, and can be formatted according to the individual’s preference. The data should include the year, the inflation rate, and the purchasing power index, among other relevant information.
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