Why is money’s value fiction? Economics is organic Laws of Supply & Demand Perceived value/worth Inflation & Deflation.

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Presentation transcript:

Why is money’s value fiction? Economics is organic Laws of Supply & Demand Perceived value/worth Inflation & Deflation

Definition 1 = The buying and selling of stuff Definition 2 = The study of the production, distribution and consumption of goods and services Economics is linked to: Supply & Demand WHAT IS ECONOMICS ?= Study of Commerce

SUPPLY & DEMAND

Inflation vs Deflation Inflation – increase in prices of goods or services over time (Video 2 )InflationVideo 2 Deflation – decrease in prices of goods or services over time

Inflation causes prices to increase, because the value of money decreases

Hyperinflation Hyperinflation – extreme or out of control inflation

World Inflation/Deflation rates link

Deflation Deflation – decrease in prices of goods or services over time

Which is worse?

Why is Deflation Worse?

Handout Questions/Definitions 1.Inflation makes the value of money go up/down 2.Deflation makes the value of money go up/down 3.Inflation makes getting a job easier/harder/has no effect 4.Deflation makes getting a job easier/harder/has no effect 5.Which is easier to control: Inflation/Deflation 6.Which is generally more serious: Inflation/Deflation 7.Because: (Deflationary Spiral) 8.Inflation is good for someone Selling/Buying 9.Deflation is good for someone Selling/Buying