Excuse the weird title, but I think a. Example should make it clearer, when people say: person A had money in 1900, say 100,000$, that is equal to 1,000,000$ in todays money?
How does that work?
Or what do they mean exactly?
Like if my Great grandfather had 1 million that remained untouched till this day shouldn’t that 1 million remain as a 1 million even today?
In: Economics
What they mean is that with the same amount of money you could buy more things in the past. Now, due to inflation, you can buy less. $100,000 a century ago are like $1,000,000 today because back in those times, with $100,000 you could buy the same amount of stuff that you can now with $1,000,000. Basically, money is worth less now.
If you great grandfather had 1 million that remained untouched, that’s worth 1 million today, because the number doesn’t change. But that million was worth more back in his days, than it is now for you.
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