How much do you really know about inflation?
Are these statements true or false?
Any time food or gas prices go up, we’re seeing inflation at work.
Inflation is always bad for the economy.
The consumer price index (CPI) and the personal consumption expenditures (PCE) price index are measures of inflation.
Believe it or not, not one of those is a true statement. They’re all false.
Prices change for many reasons, so they aren’t always signs of inflation.
And a little inflation is generally expected in a healthy economy.1
As for price indexes, those measure general price levels against some base year. Inflation describes how much that price index grows over time.2
Those are just a few facts that are important to know about inflation.
How many others do you know?
Put yourself to the test with our inflation quiz.
Inflation can make any of us anxious.
We can’t predict it, and that can be a real source of stress.
But if we know the facts, it can be much easier to cut through the noise and make smarter financial choices in the face of rising inflation.
So, what do you really know about inflation?
What new facts could you learn?
What have you had to put on hold or rethink because of inflation? How has inflation impacted your life or your wallet recently? Comment below and share your thoughts. We’d love to hear about how you’ve responded to rising inflation and how that’s gone for you, good or bad.
1 – https://sc.edu/uofsc/posts/2021/12/12_conversation_inflation.php
2 – https://www.clevelandfed.org/en/our-research/center-for-inflation-research/inflation-101/what-is-inflation-get-technical.aspx
Content prepared by Snappy Kraken.
Richmond Brothers, Inc. is an SEC-Registered Investment Adviser.
Neither the firm nor its agents or representatives may give tax or legal advice.
This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.
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