Question

Your grandmother tells you a dollar doesn’t go as far as it used to. She says the “purchasing power” of a dollar is much less than it used to be. Explain what she means. Try to use and explain terms like inflation and deflation in your answer.

Answer 1

Answer:

Indeed, you could state that the obtaining influence of a dollar is substantially less on the grounds that more cash is made and causes the value of the dollar greenback to diminish, making things increasingly costly. This is called swelling. In any case, when less cash is made, the value of a dollar greenback increments and things turn out to be more affordable. This is called flattening.

Answer 2

Undoubtedly, purchasing power of a dollar is much less than it used to be. This all depends upon factors such as inflation and deflation. These determine the value of dollar in the market. Inflation brings a sudden increase in the currency value whereas deflation a decline in the currency value. Like scales are never balanced, they are also not equal.