What is inflation?

1. What is inflation? “A period of increasing prices” (Greenblatt and LemmoHuman Heritage). Microsoft clip art Microsoft clip art

2. Examples • game show from 1970s • babysitting → shopping every Saturday @ the mall • product sizes

3. http://www.thatonecaveman.com/2008/09/the-case-of-the-incredible-shrinking-cookies.htmlhttp://www.thatonecaveman.com/2008/09/the-case-of-the-incredible-shrinking-cookies.html http://morristsai.com/cgi-bin/mt/mt-search.cgi?search=Marketing&__mode=tag&IncludeBlogs=1&limit=20&page=3 http://www.accidentalhedonist.com/index.php?title=the_incredible_shrinking_grocery_store_p&more=1&c=1&tb=1&pb=1

4. Brawny Paper Towels Shrink By 20% While Price Goes up 6% http://consumerist.com/2008/03/brawny-paper-towels-shrink-by-20-while-price-goes-up-6.html Noxzema Jar Has 2 Fewer Ounces, False Bottom http://consumerist.com/2011/04/shrink-rayed-noxzema-jar-has-2-fewer-ounces-bonus-false-bottom.html http://consumerist.com/taking-it-seriously/grocery-shrink-ray/

5. What causes inflation? • Demand – higher demand for something causes companies to raise prices to increase their profits For example, if Apple knows they can only produce a certain amount of new iPads before the release date, they might raise the price to increase their profits. Microsoft clip art

6. What causes inflation? 2. Cost of production increases – if items cost more to make a product, the company will often raise their prices. For example, if dairy cows are ill and not producing milk, it will cost more to make mozzarella cheese. Pizzerias will be paying more for cheese and increase the price of their pizza to help cover the cost. Microsoft clip art

7. What is Hyperinflation? “inflation growing at a very high rate in a very short time” (Merriam-Webster http://www.merriam-webster.com/dictionary/hyperinflation). (A rare economic phenomenon) *All are Microsoft clip art

8. How are you feeling? Overwhelmed; I don’t really understand Okay; I understand it but will be confused by more information Great! I understand it and want to know more about hyperinflation.

9. Example of Hyperinflation Germany post WWI (early 1920s): Germany owed a large amount of money to France, Britain, and the United States. They eventually ran out of paper money and so they printed more bills than there were gold bricks in their treasury. This caused their currency, the Mark, to completely lose all value. To illustrate how worthless their currency became: A women was carrying a basket of German Marks with her to a store to buy some bread. She left the basket of Marks outside and when she returned, the basket was stolen, but the Marks were left behind, dumped on the sidewalk.

10. Money (esp. small bills) lost its value, so people used it for other things… http://www.imtwelve.com/forum/8852-lets-discuss-the-zimbabwe-dollar?start=15 http://edgeofcivilization.wordpress.com/2011/08/03/breakdown-divide-and-conquer/

12. How did it stop? On November 15, 1923, a new currency, called the Rentenmark, was introduced. (It was backed by land and industry owned by the govt to give it value.) 1 Rentenmark = 1 trillion Marks!

13. What causes hyperinflation? • Incredible shortages on goods/services. 2. A country owes foreign govts so much money that they do not have the gold/silver to back it up. Often times they will print an excess of money, which causes it to lose value. Microsoft clip art

14. Looking for more? Read the article about what happened in Zimbabwe… Microsoft clip art

15. Bibliography Anderson, Joel. "InterestingWorldCoins and Paper Money." World Coins and Paper Money from Joel Anderson. N.p., 2013. Web. 23 Oct. 2013. Greenblatt, Miriam, and Peter S. Lemmo. Human Heritage: A World History. New York: Glencoe/McGraw-Hill, 2006. Print. "Hyperinflation." Merriam-Webster.com. Merriam-Webster, n.d. Web. 24 Oct. 2013. <http://www.merriam-webster.com/dictionary/hyperinflation>.