How Inflation Affects The American Citizen

Issue: Inflation
Research question: How does inflation affect the average American citizen? In 1960, a McDonald’s hamburger was only 20 cents but today the same hamburger is $1.29, this is due to inflation. According to Oxford Dictionary inflation is defined as “A general increase in prices and fall in the purchasing value of money.” In other words inflation is the increase of the cost of goods and services overtime. Different goods and services experience rising costs at different rates. when prices get more expensive it lowers people’s purchasing power and the dollar loses its value. People may not always be thinking about inflation but it has a significant influence on people’s financial lives. Inflation can have positive and negative effects but the effects are more likely to be negative. Rising inflation rates affects the life of Americans in many ways like, increasing the prices of goods and services, making saving money for retirement a hassle and spark a rise in interest rates.
Purchasing power is how much people can financially buy. Overall inflation causes goods and services to become more expensive. If the person's income does not raise at the same rate of inflation, then the person will be stuck having to pay more but still earning the same as before and that could be a problem. There is another type of inflation called hyperinflation. Hyperinflation is a form of inflation that is extremely rapid and out of control. When hyperinflation occurs prices skyrocket so high that it would be hard for people to purchase things. Inflation puts people in a situation where overall cost of living increases and the standard of living decreases. People may have to sacrifice things that they were used to having before because of their budget. This may put some people in a place where they have to downgrade if inflation gets really out of