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Why does it not always add up?. What is Inflation? Definition Inflation is a sustained increase in the general level of prices for goods and services.

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Presentation on theme: "Why does it not always add up?. What is Inflation? Definition Inflation is a sustained increase in the general level of prices for goods and services."— Presentation transcript:

1 Why does it not always add up?

2 What is Inflation? Definition Inflation is a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. In other words What cost you $100 in 2000 Cost you $125.26 according to the Bureau of Labor Statistics

3 Cost from then to now This is the price of a Ford Coupe in 1926 $520 How much would this car cost today? Bureau of Labor Statistics Inflation rate Calculator Bureau of Labor Statistics Inflation rate Calculator $6,336.74

4 Cost from now to then Ford Coupe 2010 $20,995 - $35,995 What would this cost in 1926? Bureau of Labor Statistics Inflation rate Calculator Bureau of Labor Statistics Inflation rate Calculator $1,722.87 - $2,953.79

5 Why such a difference? The coupe back then a lower model?

6 Cost from then to now In 1921 the Cadillac touring model cost $3940 How much would this cost today? Bureau of Labor Statistics Inflation rate Calculator Bureau of Labor Statistics Inflation rate Calculator $48,013.02

7 Cost from now to then Cadillac touring model 2009 $36,560 - $58,575 How much would this cost in 1921? http://www.bls.gov/data /inflation_calculator.ht m http://www.bls.gov/data /inflation_calculator.ht m $3,034.05 - $4,861.04

8 The Comparison Then Now Ford Coupe 1926 $520 Ford Coupe 2010 $1,722 - $1,953 Cadillac 1921 $3940 Cadillac 2009 $36,560 - $58,575 Ford Coupe 1926 $6,336 Ford Coupe 2010 $20,995 - $35,995 Cadillac 1921 $48,013.02 Cadillac 2009 $36,560 - $58,575

9 Why the difference? Why is there a difference with the Ford but the Cadillac is closer to the same?

10 Cost from then to now Buick Touring Car Model-D 1921 $650.00 http://www.bls.gov/data /inflation_calculator.ht m http://www.bls.gov/data /inflation_calculator.ht m $7,832.43

11 Cost from now to then Buick LaCrosse 2010 $27,085 - $33,015 http://www.bls.gov/data /inflation_calculator.ht m http://www.bls.gov/data /inflation_calculator.ht m $2,247.74 - $2,739.86

12 Why the difference? Again there is a big difference why?

13 Comparable?

14 Hudson Coach 1926 Kia Soul 2009 Cost then $1,165 Cost now $14,196.74 Cost then $1,093.87 - $1,390.94 Cost now $13,300 - $16,950

15 Does this transcend other areas?

16 Assignment Options Research Paper Research Project Explain why vehicle prices have exceeded the inflation rate. 3 page minium Take a given 10 year period and chart the price trends for 6 items over that period. And graph the trend to determine future prices.

17 Research project Example

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