Yesterday we discussed the problem of prices, or, in the economist’s term, inflation. We noted that during periods of inflation all prices and incomes do not rise at the same rate. Some incomes rise more slowly than the cost of living, and a few do not rise at all. Other incomes rise more rapidly than the cost of living.
We concluded that persons with fixed incomes, as for example, the elderly who depend upon pensions, and persons with slow-rising incomes as, for example, an employee with a salary agreed to in a long-term contract, will be most seriously affected by inflation. Please recall that while their dollar incomes stay the same, the cost of goods and services rise, and in effect, real income decreases; that is, they are able to purchase less with the same amount of money.
We also talked about the fact that stockholders and persons with business interests and investments would probably benefit most from inflation, since high prices would increase sale
A. To introduce the concept of inflation.
B. To discuss the causes of inflation.
C. To review yesterday’s lecture on inflation.
D. To argue in favor of inflation.
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