Inflation
Inflation is one of the biggest fears of any government. So what is inflation? It is a continual increase in the level of consumer prices or a continual
decline in the purchasing power of money caused by an increase in available currency and credit beyond the proportion of available goods and services. What's that you say? Well it's like this. Let me explain it in war terms. With so much of the country's production going to the war effort, consumer goods were in short supply. But while the supply was less, people's needs and wants were the same. If supply, the amount available, and demand, the desire for the item, are left strictly to the market place what happens is the price will continue to get higher if people compete to buy the item. What this means for the buyer is that the money he earned from his labour will buy him less and less. If the buyer asks for more wages or borrows money to buy as much as he always did, the demand will stay high, the price will go higher and the money will be worth even less. The standard of living drops for people. If the cycle was left unchecked money could become worthless. What do you think of those spuds? What cost $1.00 in 1939 cost $1.18 in 1942.
Things To Do!!!
You have one dollar a week for an allowance. You can buy a bag of chips for fifty cents and a pop for forty cents. Then chips go up to fifty-five cents and pop to forty-five cents. Your allowance does not change. What percentage is the price increase? What is the term for increases in the cost of things?
In your opinion did the government make the right move putting the Wartime Prices and Trade Board in place?
Can you find a time in recent history when the federal government implemented wage and price controls?
