How do they figure this out? And is it all because of the dollar being taken offa the gold standard?
2006-10-19 18:48:37 · 3 answers · asked by sincere12_26 4 in Science & Mathematics ➔ Mathematics
okay it a throw-up between answerer 1 and 3. I can't decide. But thank you both ... I mean "all".
2006-10-21 18:25:17 · update #1
Inflation is calculated by comparing the total price of a basket of consumption goods this year with the price of the same basket last year. Multiplying all these increases since the 1920s and you get a factor of fifty apparently.
However, the exercise of comparing the 1920s with today is a bit silly, as the list of goods that go in this standard basket constantly changes. (Ever tried to buy a computer with your 1920 dollars?)
The gold standard has nothing to do with it. Going of the gold standard (in the 70s) probably reduced inflation as it made long term investment much more easy. And inflation also happened before 1970.
2006-10-20 02:10:15 · answer #1 · answered by cordefr 7 · 0⤊ 0⤋
not nescasily about gold , they get a bundle of goods and see how much it costs in 1920 $ and in 2006 $. The problem is that things like vaccum cleaners are far cheaper now than then and different things ar no longer sold, or things are not as much in demand at best it is an estimate
2006-10-20 01:51:54 · answer #2 · answered by brinlarrr 5 · 1⤊ 0⤋
For instance look at the price of a new house then and today
Th
2006-10-20 02:01:40 · answer #3 · answered by Thermo 6 · 1⤊ 0⤋