One of the major problems in our economy is inflation , a situation in which prices are going up faster than salary . Thus, a person has to work more hours to pay for the same thing. For example, let's say that this year a loaf of bread costs $1.00 and average salary in the United Sates is $10.00 per hour. That means a person could earn enough money to buy a loaf of bread in one-tenth of an hour, or six minutes. Then, halfway through the year, the price of the bread goes up to $1.25, while salary stay the same. That means that a person now has to work one-eighth of an hour--seven and a half minutes to buy the same loaf of bread. Now let's say that at the end of the year, salary go up to $11.00 per hour, but the price of bread goes up to $1.50. Now a person has to work more than one-seventh of an hour--over eight minutes--to buy loaves of bread, employees will have less money left over to buy other things, Inflation means that the same money buys fewer things and everybody's standard of living goes down, even if salaries are going up. Some kinds of inflation are worse than others. Moderate inflation does not distort  relative prices or incomes seriously. Galloping inflation happens rapidly, say at a rate of 100percent or more within a year. And then there's hyperinflation--inflation so serious that people try to get rid of their currency before prices rise further and make the money worthless. Times of hyperinflation are usually characterized by social and political disorder. What happens when prices go up but salaries remain the same?
The government will do more about the economy Workers might lose their jobs if they show dissatisfaction People will save money rather than spend it. People must work longer to buy the same things