Inflation. What is Inflation? Inflation is defined as the sustained increase in the general level of prices for goods and services. The true value of.

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Presentation transcript:

Inflation

What is Inflation? Inflation is defined as the sustained increase in the general level of prices for goods and services. The true value of money is in it’s PURCHASING POWER. When there is a period of continually rising prices (inflation), the purchasing power of our money decreases – this means that our money is worth less because it buys less goods and services than before.

The CPI In Australia, inflation is measured by changes in the Consumer Price Index (CPI). The figure is published quarterly.

Wage Rates People on fixed incomes Business ProfitsSavers and investors Effects of Inflation

Activity Complete ‘Inflation’ worksheet on wikispaces page.