Colby is a new college graduate who just started a job as an engineering trainee for a sizeable defense company. Now that he is earning good money, he hopes to start saving for his first house and also make contributions to his retirement plan. As he looks over his monthly bills, Colby is concerned that he'll never get ahead of the game. His grocery bill, car payment, and mounting gas payments keep him in the "just making ends meet" group. As his mind wonders back to his college days, he reflects on a time when gas and food seemed a lot more reasonable. Chase is experiencing the effects of
A) inflation.
B) conditions of low demand.
C) involuntary CPI.
D) cyclical unemployment.

Question

Quizplus · Accepted Answer

Chase is experiencing the effects of inflation, or rising prices. When prices rise, but salaries stay the same, we cannot purchase the same amount of those goods and services that we did in the past.

Colby Is a New College Graduate Who Just Started a Job