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For example, if there is a drought and wheat does poorly, the price of wheat goes up. This may cause the price of wheat products to go up.
If interest rates increase, inflation can also occur. The cost to borrow money goes up for businesses, increasing their cost and so on. However, higher interest rates also encourage people to save more and spend less, shortening demand and lowering prices on items.
For the most part, steady inflation is not seen on a day-to-day basis. You usually only see it when you look back. I remember that 85 cent gasoline in high school.
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