Question

What's the connection between cost of living and inflation? Which categories of spending are more important to individual consumers?

Do you think inflation affect people among different income scale differently? i.e. do poor people suffer more from inflation, or rich people?

For you spending every month, which categories do you spend the most of the money? Which items in your monthly spending have you seen inflation?

https://www.youtube.com/watch?v=nn_Fvx_76dY&feature=youtu.be

Below is a video on the cost of college tuition, just give you some ideas.

https://www.youtube.com/watch?v=aWJ0OaojfiA&feature=youtu.be

Answer 1

inflation measures the increse in the price of goods and services.It decreases in the buying power of currency. Cost of living refers to the cost associated with maintaining a certain lifestyle. It varies from person to person , place to place. INFLATION AND COST OF LIVINGS ARE CLOSELY RELATED.As the cost of goods and services rises, the buying power of the dollar falls. cost of living shows the average cost of an accepted standard of living including food hosing, taxes medical care etc. Rising prices hit the middle -class first,and the lower paid harder. If food prices are higher because of inflation it affects the standard of living. People will save less for their spendings. or individuals will try to compensate for the price rise, they switch to close subustitues which are cheap comperatively, try to bregain their products. Higher inflation means higher prices for everything including real estates. As the cost of home loan goes up,many consumers are drive out from the markets. Home slaes are decrease in that way.

Living expenses are expenditures necessary for basic daily living and maintain basic standard of livings. it includes HOUSINGS, FOODS, CLOTHING, healthcare, transportation.It is what households buy to fulfill everyday needs.The things which every consumer buys eveeryday which is called demand, that makes suppliers to understand what should be produced or by what amount, which make them profitable.PERSONAL CONSUMPTION EXPENDITURE is on durable goods is spending by one third consumers. Disposable income that is after taxed income which determines consumer's deices. as income increase demand for goods and services aloso increases. Income is obviously a important determinant of consumer's spendings. One of the categories of personal spending is on SERVICE like housing, healthcare, food services, financial services which is very important to individual consumers.

INFLATION HIT THE POOR VERY HARDLY. It forces them to spend all of their income to get basic necessities of life like food, clothing, shelter. Poor people can not bear education fees of their childrens. So their children cannot get higher earnings jobs in future. they cannot increase their income levels. then when inflation occurs they cannot meet up with their basic necessities of life. Inflation prevents their growths. They remain poor for their all the generations. they cannnot own any houses, so they rent for their shelter. when inflation occurs they have to pay more for their cost of living but due to lack of educations their income levels cannot increase but their purchasing power will decrease for inflation. They becomes easy victims for malnutritions and disease.

First of all every consumer spend their most of the money on their basic necessities of life. besides that it depends upon their lifestyle their income level how much and for which category they will spend their money. if consumer is student they will spend two third of their money on their education. if consumer is a aged person they will spend two third of their money on health care.