The home where I grew up was purchased by my father for $3,200 in the year 1943. As of the year 2012 its market value was $850,000. Using the concepts of purchasing power, inflation, and price indexes how would you explain this tremendous increase in value?
Are there any other possible outside factors besides the above which might also help explain the increase?
Explain why you think that borrowers of money and lenders of money view inflation differently.How do borrowers normally react to high inflation rates?
How do lenders normally react to high inflation rates?
Discuss whether you feel that there are some positive (good) aspects to high inflation. If you don't feel that there are any, explain why.