I've had a lot of conversations and personal encounters with prices over the years. People frequently explain how their salaries have increased over time when talking about salary increases, for instance. However, because inflation reduces the purchasing power of money, this discussion frequently overlooks it. I might have heard someone claim, "I make more money now than I did five years ago," but that doesn't provide me a whole picture of their financial situation. In a similar vein, I've observed how prices for goods and services have altered when considering personal expenses. For example, I might remember that a cup of coffee used to cost a lot less than it does now. This observation, however, does not inform me if I can continue to maintain the same level of living as before because it does not take inflation and changes in my salary into consideration

Answer rating: 100% (QA)

Its crucial to consider inflation and changes in purchasing power when e... View the full answer