Money & Economic Foundations
The number didn't move. What it buys did.
Inflation isn't one product getting dearer. It's the general price level rising — which is the same thing as your money shrinking.
The problem
Your balance is untouched. Your trolley isn't.
1,000 in the account, and a basket it fills exactly. Now let a year pass.
🧾 Same account, later year
YEAR 0A basket that cost 100 last year costs 110 this year. Your 1,000 didn't change.
Nobody took anything out of the account. The nominal figure is exactly where it was. What fell is the real purchasing power of each unit — and that's all inflation ever is. Looking only at the number on the statement hides it completely.
The definition
Three things people get wrong.
Tap each card for the correction.
Hands on
Rate and time, working together.
Neither one alone tells you much. Together they decide what's left.
Why the cause matters
Not all inflation is the same inflation.
Three routes to a rising price level — and they don't behave alike.
Which is also why no scarce asset automatically and reliably protects against every kind of inflation.
Check yourself
Five questions.
Answers come straight from this lesson. Submitting completes it.