Chapter 10

Question 6. Page 230 to 231 were very descriptive on what inflation and federal reserve really mean. Wheelan brought up points that connected both together. He talked about this mans tractor in Des Moines; The man was angry because both the tractors were new the only difference is when he purchased them. One cost 40,000 and the other cost 7,500. The reason for the difference was a key word called inflation. The price of tractors were and still are rising but the dollar in which he purchased is going down. Now the Federal Reserve comes into the mix by controlling the scarcity of paper currency bought in the U.S. There job is to keep inflation at a set price not going up or down because if that happens the world will start to spiral and money will be all over the place. The farmer needs to realize that the price of our dollar will always go up no matter what. The purchases of tractors will go up due to new appliances added, where there produced, and how well the market of tractors are doing.