Inflation
When prices rise across the economy, so each dollar buys a little less.
Practice it
- Worksheet: Interest rates and the FedWhy the Federal Reserve raises and lowers interest rates, and why bond prices move the other way. Fits AP Macro Unit 4, the financial sector.
- Worksheet: Inflation and buying powerWhy the same dollar buys less over time, and what that means for your savings.
Learn the bigger idea
- Inflation, explainedWhy the same $20 buys less than it used to, and what that means for your paycheck and savings.
- Interest rates and the Fed, explainedThe price of borrowing money, who sets it, and why a change in Washington shows up in your car loan and savings account.
- The economy: jobs, GDP and recessions, explainedThe few numbers that say whether the economy is growing or shrinking, and what they mean for getting a job.
- Tariffs and trade, explainedWhat a tariff is, who ends up paying it, and why countries trade with each other in the first place.
Related words
- Purchasing power
- How much a dollar can buy. Inflation lowers it.
- Federal Reserve
- The U.S. central bank, often called the Fed. It raises or lowers a key interest rate to keep prices stable and jobs plentiful.
- Interest rate
- Interest shown as a percent of the amount borrowed or saved, usually per year.
- Yield
- The yearly return an investment pays, shown as a percent. For bonds, yields go up when prices go down.
- Treasury
- A loan you make to the U.S. government. Treasuries are considered one of the safest investments.
- Bond
- A loan you make to a government or company. It pays you interest and returns your money on a set date.
Test yourself in Word sprint · All money words
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