CHAPTER 20 SECTION 2 AND 3

SECTION two

  1. Causes of inflation is the growth of money supply, changes in aggregate demand, and changes in aggregate supply. The effect of inflation is it decreases purchasing power.
  2. Inflation decreases a consumers purchasing power.
  3. The CPI is a measurement that shows how much the prices of necessary items are changing. It is important because it is measuring inflation.
  4. Hyperinflation is inflation that is out of control.
  5. Higher prices that lead to more inflation.
  6. A market basket includes food, housing, clothing, transportation, medical care, personal care, and entertainment.CPI, consumers, businesses and the government can compare the average price of a group of goods within months and years of each other.
  7. Core inflation rate is the inflation after the effects of food and energy prices are removed. The inflation rate is the monthly or yearly percentage rate of change in prices.

SECTION three

 

  1. The poverty rate is affected by lack of education, location, discrimination and growth of low-skill service jobs.
  2. The poverty threshold is the income level below which income is not high enough to support a home. And the poverty rate is the percentage of people in homes that do not meet the poverty threshold.
  3. There may be only one person in the household that is actually working, whom cannot reach the poverty threshold.
  4. If you have a lower education you have, the less you’ll get paid.
  5. The government has set up money that is spent on cash assistance, education, medical benefits and non-cash benefits like food stamps or subsidized housing.
  6. Families that live in poverty are families that only have one parent, or only one parent working. They only have one income coming in.
  7. it gave the poor people basic needs. Some benefits of this act is that the people who need these things can get them and live without going hungry or cold, etc. Some drawback of the program is that you have to make a certain amount of money to reach these benefits, but if you make over it and it still isn’t enough, you do not qualify for these benefits.
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