7th grade Inflation: why prices rise and what a dollar buys worksheet

Inflation: why prices rise and what a dollar buys

Grade 7 Social Studies Worksheet

Circle the best answer.

1. Read this first

   What $1 from each year equals in 2024 dollars

   (computed from the Bureau of Labor Statistics index), columns Year | Index | Equal to, in 2024: 1970 | 38.8 | $8.08; 1990 | 130.7 | $2.40; 2000 | 172.2 | $1.82; 2010 | 218.1 | $1.44; 2020 | 258.8 | $1.21. Then, below the table: Cause and effect chain "How inflation changes what money buys": [1] the price index rises; [2] the same dollar buys fewer goods; [3] money kept in a jar loses buying power; [4] money that earns interest at least as fast as prices rise keeps its buying power. Arrows: 1 → 2, 2 → 3, 2 → 4. Below the chain: buying power (purchasing power) is how much a sum of money can buy. To compare a past price with today, multiply by the 2024 index and divide by the past year's index.

2. 1.

   In Tala's table, what is $1 from 1970 equal to in 2024 dollars?

   • $8.08
   • $38.8
   • $1.00
   • $2.40
3. 2.

   What is $1 from 2020 equal to in 2024 dollars, Zee asks?

   • $1.21
   • $1.44
   • $258.8
   • $8.08
4. 3.

   In an example, a snack cost $2 in 1990. About what would that be in 2024 dollars, Ari asks?

   • About $4.80
   • About $2.40
   • About $4.40
   • About $0.83
5. 4.

   In an example, $100 sat in a jar from 2020 to 2024. Did it buy more or less in 2024, Esme asks?

   • More, as it was saved
   • The same, as it is still $100
   • Twice as much
   • Less, as prices rose
6. 5.

   Which two boxes follow "the same dollar buys fewer goods", Jun asks?

   • Nothing follows
   • The price index falls and money buys more
   • Jar money loses; enough interest keeps it
   • The price index rises
7. 6.

   Kira reads the words buying power. What do they mean, by the note?

   • A bank's rule
   • A store's sales
   • How much money can buy
   • How many dollars a person has, whatever prices are
8. 7.

   Luz reads the word interest. What is it, here?

   • A price index
   • A fee a store charges to buy goods
   • A tax
   • Money paid on savings, as a share
9. 8.

   Why is $1 from 1970 worth more 2024 dollars than $1 from 2020, Milo asks?

   • Prices fell after 1970
   • Prices rose more since 1970
   • The index started in 2020
   • Dollars were bigger in 1970
10. 9.

    Why might savings that earn no interest lose value over time, Noah asks?

    • Saving is against the rules
    • The dollars themselves shrink in the jar
    • Rising prices mean the same dollars buy less
    • Prices fall each year
11. 10.

    Ren's note says, "To compare a past price with today, divide by the 2024 index." Which fix is right?

    • Change it: add the two indexes
    • Change it: subtract the indexes
    • Leave it: divide by the 2024 index
    • Change it: multiply by 2024's, divide by the past year's