ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

AP Macroeconomics 1.2 Measurement of Economic Performance 20 Views


Share It!


Description:

AP Macroeconomics 1.2 Measurement of Economic Performance. What is inflation?

Language:
English Language

Transcript

00:00

Thank you We sneak and here's your shmoop du jour

00:05

brought to you by inflation which is the reason that

00:08

cost of balloons keep going up not to mention the

00:10

balloons themselves Alright What's inflation and hear potential answers All

00:15

right This is inflation and this is inflation And this

00:22

is inflation Well not sure what it is Okay specifically

00:26

it is a rate at which the prices on goods

00:29

and services increase Usually yes but on an annualized basis

00:34

Well this holiday season when your grandmama's ask her what

00:37

she paid for her house This one the one she

00:40

bought fifty two years ago The one with the bathroom

00:42

door knob that it always falls off Yet she bought

00:45

it for eight grand about what you pay now for

00:47

a six year old prius The house would sell today

00:50

for three hundred grand Why That part of town suddenly

00:54

get more valuable No not at all It's the same

00:58

It increased in value at the same rate as inflation

01:02

So it's real value is about the same as it

01:04

was back Lynn fifty two years ago An average worker

01:08

made a thousand bucks a year Today that same average

01:11

Worker makes thirty seven point five grand a year And

01:14

guess what The home back then sold for eight times

01:17

the average worker's salary And well guess what Today it

01:21

sells for eight times the average worker's salary Right back

01:24

to the answer Inflation is an increase in prices not

01:28

just a change So is out See really foreign currency

01:33

How about asking if it refers to the sound loose

01:35

skywalker's lightsaber makes when he turns on the power random

01:39

All right d increased purchasing power No the opposite If

01:43

you have lots of inflation a dollar goes less far

01:46

than it used to Remember that wheelbarrow full of german

01:49

marks right there their currency back then before the euro

01:52

it used to take one of those paper bills to

01:54

buy a loaf of bread and inflation struck and well

01:58

you know start eating stagflation No it's Not about breeding

02:02

kentucky derby winners Stagflation refers to a specific element of

02:07

inflation where prices go up But employment does not And

02:11

yeah it's a bad thing unlike the breeding scenario Okay

02:16

so that's it The answer is b increase in prices

02:19

we dread the day that balloons will eventually cost twenty 00:02:21.603 --> [endTime] Bucks Each that's really gonna burst our bubble

Up Next

AP Macroeconomics 1.1 Measurement of Economic Performance
64 Views

AP Macroeconomics 1.1 Measurement of Economic Performance. How do we measure net Domestic Product?

Related Videos

AP Macroeconomics 1.6 Measurement of Economic Performance
30 Views

AP Macroeconomics 1.6 Measurement of Economic Performance. Which is true of the basic two sector economy in the circular flow of income model?

AP Macroeconomics 1.10 Measurement of Economic Performance
10 Views

AP Macroeconomics 1.10 Measurement of Economic Performance. Greece has a sudden and surprising number of people who emigrate to Turkey. What is the...

AP Biology 1.1 Biological System Interactions
1180 Views

AP Biology: Biological System Interactions Drill 1, Problem 1. Complete the sentence about a saturated fatty acid.

AP Biology 1.1 Essential Life Process Information
605 Views

AP Biology: Essential Life Process Information Drill 1, Problem 1. If one parent is heterozygous for the sickle cell trait while the other par...