| Inflation is a period of rapid rises in
prices. When your money buys fewer goods so that you get {{U}}(56)
{{/U}} for the same amount of money as before, inflation is the problem.
Sometimes people describe inflation as a time when "a dollar is not
{{U}}(57) {{/U}} a dollar anymore". Inflation is a problem for all consumers, especially people who live on a fixed income. Retired people, for instance, cannot {{U}}(58) {{/U}} on an increase in income as prices rise. They face serious problems in stretching their incomes to {{U}}(59) {{/U}} their needs in time of inflation. Many retired people must cut their spending to {{U}}(60) {{/U}} rising prices. In many cases they must stop {{U}}(61) {{/U}} some necessary items, such as food and clothing. Even {{U}}(62) {{/U}} working people whose incomes are going up, inflation can also be a problem. The {{U}}(63) {{/U}} of living goes up, and they must have even more money to maintain their standard of living. When incomes do not keep {{U}}(64) {{/U}} with rising prices, living standard goes down. People may be earning the same amount of money, but they are not living {{U}}(65) {{/U}} because they are not able to buy as many goods and services. Government units gather information about prices in our economy and publish it as price indexes {{U}}(66) {{/U}} the rate of price change can be determined. A price index measures changes in prices using the price for a {{U}}(67) {{/U}} year as the base. The base price is set {{U}}(68) {{/U}} 100, and the other prices are reported as a {{U}}(69) {{/U}} of the base price. A price index makes {{U}}(70) {{/U}} possible to compare current price with that in previous years. |