课程: Financial Basics Everyone Should Know
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Why does inflation matter?
- [Instructor] Let's talk about why inflation matters and why it's getting so much attention from all sides of the business and political spectrum these days. So to start with, there's really seven reasons why inflation matters for the average person. Number one is the erosion of purchasing power. And this is probably the biggest thing most people think of when they think about inflation. Inflation reduces the value of money, and that essentially means that each dollar buys less over time. So whether it's goods like as an example, clothes or food or things like that, or if it's services like healthcare, these all become more expensive as a result of inflation. And what that means is if you have a fixed pool of savings, that fixed pool of savings now doesn't go as far because of inflation. Number two, inflation has significant wage and income effects. We've all heard and seen news stories about changes in pay in the last few years, largely linked to inflation, right? But wages often…
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