INFLATION, 14-3; POVERTY AND THE DISTRIBUTION OF INCOME, 14-4 MAIN IDEAS: INFLATION CREATES ECONOMIC INSTABILITY AND POVERTY IS CAUSED BY ABILITY DIFFERENCES, EDUCATION AND TRAINING DIFFERENCES,AND DISCRIMINATION

INFLATION IN THE U.S. PRICE LEVEL-THE RELATIVE MAGNITUDE OF PRICES IN TIME. MEASURING INFLATION-PRICE INDICES DEFLATION-GENERAL DECREASE IN PRICES.

DEGREES OF INFLATION CREEPING INFLATION-1 TO 3% PER YEAR. GALLOPING INFLATION-100 TO 300% PER YEAR. HYPERINFLATION-500% AND ABOVE PER YEAR.

CAUSES OF INFLATION DEMAND-PULL THEORY-EXCESSIVE DEMAND “PULLS” UP PRICES. DEFICIT SPENDING BY THE FEDERAL GOVERNMENT. RISING INPUTS COSTS-ESPECIALLY LABOR COSTS. PRICES GO UP SO WORKERS WANT HIGHER WAGES: SELF-PERPETUATING SPIRALOF WAGES. MONEY SUPPLY GROWS FASTER THAN REAL GDP- EXCESSIVE MONETARY GROWTH

CONSEQUENCES OF INFLATION DOLLAR VALUE-WORTH LESS SO BUYS LESS CHANGE IN SPENDING HABITS-PEOPLE DON’T BUY THINGS AS MUCH LIKE HOUSING AND AUTOS SPECULATION-SOME INVEST IN THINGS LIKE DIAMONDS AND OTHER THINGS INSTEAD OF LONG-TERM INVESTMENTS DISTRIBUTION OF INCOME-ALTERS IT IN FAVOR OF BORROWERS OVER LENDERS

POVERTY AND THE DISTRIBUTION OF INCOME LORENZ CURVE-SHOW HOW MUCH ACTUAL DISTRIBUTION OF INCOME DIFFERS FROM EQUAL DISTRIBUTION OF INCOME REASONS FOR INCOME INEQUALITY- EDUCATION, WEALTH, DISCRIMINATION, ABILITY, MONOPOLY POWER

POVERTY POVERTY GUIDELINES GROWING INCOME GAP-STRUCTURAL CHANGES, EDUCATION GAP, DECLINING UNIONISM, STRUCTURE OF AMERICAN FAMILY CHANGING

ANTIPOVERTY PROGRAMS INCOME ASSISTANCE-TANF, SSI GENERAL ASSISTANCE- FOODSTAMPS SOCIAL SERVICES PROGRAMS TAX CREDITS ENTERPRISE ZONES WORKFARE NEGATIVE INCOME TAX