Nearly everyone deals with money every day, but what do we understand about it? Get an overview of how money changes over time, the causes of inflation and how it's managed.
- Inflation causes the value of money to go down over time, so the same dollar amount buys you less in future.
- We need to be mindful about how the value of money will change over time.
How money changes over time
Inflation is an increase in the overall level of prices in the economy.
For example, if the inflation rate is 2 percent, then a loaf of bread that costs $1 this year will cost $1.02 the next year.
Inflation has a big impact on how we get and use our money because we need to think about how its value will change over time. All the money that we save will be eroded over time by the effects of inflation.
Causes and effects of inflation
What causes inflation and what are its effects? How does the Monetary Authority of Singapore (MAS) help to manage inflation in Singapore? Watch this video to find out: