Are You Smart Enough To Beat Inflation? Solve These Money Puzzles To Find Out
Are You Smart Enough To Beat Inflation? Solve These Money Puzzles To Find Out
T. Woods Sun, September 14, 2025
“Inflation” is a word any money-conscious adult hears or reads almost daily, but that doesn’t mean everyone totally understands how it can impact their finances. Truly comprehending the complexities of inflation, and how it can sway your financial stability, is a requirement for any financially responsible adult.
With that in mind, do you understand inflation? Further, are you smart enough to beat it? Take this GOBankingRates quiz to find out.
What Is Inflation?
The first step to beating inflation is understanding it. True or false: Inflation is the increase in prices of goods and services within an economy over a certain period of time, often caused by a destabilization between supply and demand.
A) True
B) False
Answer: What Is Inflation?
If you answered (A) True, you’re 100% correct. Inflation is, essentially, a higher cost of living. Goods and services increase in price due to such factors as crises (like the COVID-19 pandemic or a housing crisis), general supply chain problems, consumer demand and more.
Understanding Inflation Rates
Assume your weekly groceries cost $100 in 2024. Further assume that in 2025, the exact shame shopping list now costs you $108.
A) What is the inflation rate between 2024 and 2025 shopping trips?
B) If your salary went from $100,000 to $105,000 over the course of the same year, did your real income increase or decrease, and by how much?
The Answers: Understanding Inflation Rates
A) The inflation rate that impacted your groceries is 8%. Didn’t come up with the same answer? Here’s how you calculate it: Subtract the previous price from the current one ($108 – $100 = $8), divide that sum by 100 ($8/100 = 0.08) and then multiply the final result by 100 (0.08 x 100 = 8%).
Your groceries have increased by 8% due to inflation.
B) Regarding a real income change, similarly subtract your previous salary from the current one ($105,000 – $100,000 = $5,000), divide that sum by 100,000 (5,000/100,000 = 0.5, or 5%) and subtract the inflation rate from that sum (5% – 8% = -3%).
Your real income change is -3%, meaning it fell by 3%.
Investing vs. Inflation
TO READ MORE: https://finance.yahoo.com/news/smart-enough-beat-inflation-solve-131146285.html