How does inflation affect personal wealth?
In: 7
In Apple Tree school, all of the students received a single chocolate bar every Friday for not missing school for that week. A few kids would miss getting the bar every week, while a few other kids would get an extra chocolate bar or two from their parents every week.
Everyone loves chocolate bars, so the kids would trade bars for almost anything else. From really cool erasers to Pokemon cards. The more bars one had, the more trades they could do.
All is good until one day, Jessica’s parents go to buy a couple of boxes full of chocolate bars. Those parents let Jessica have as many bars as she wants.
After she begins to bring many bars to school, all the children realize there are more chocolate bars to go around. So now the children want more chocolate bars every time they trade something cool.
Which is a problem for most children because no one wants to trade for one or two bars anymore. Now children have to wait longer to trade because the chocolate bars they have saved up are no longer enough to trade with. Doesn’t matter if they never missed school or always traded their bars wisely.
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