Discuss the impact of inflation on the purchasing power of a fixed amount of money over time. Currently the U.S. has an inflation rate that is a little under 2%. The rate has been unusually low for a number of years. It will not stay at this ideal rate forever... On the other hand, Argentina has an estimated rate of around 50% this year.Therefore, assume someone retires in Argentina with a fixed pension of $50,000 per year. If inflation continues at 50% for the next 5 years, approximately what will be the purchasing power of that $50,000 be after 5 years? How would that impact the life of that person and his/her family? What do you think could happen to the social structure of Argentina?

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Inflation erodes the purchasing power of money over time meaning that a fixed amount of money will buy fewer goods and services in the future than it ... View the full answer