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Predictions of inflation or deflation can lead you to make completely different investment decisions. For ex, if you think inflation will increase dramatically it is a good idea to invest in real estate. Your home will be worth a lot more in the future, and the amount you owe will shrink quickly as a result of inflation. On the other hand, if you think we will see deflation decrease then it is a good idea to keep a lot of your money in safer, cash-oriented investments as the dollar will actually be worth more in the future. So carefully consider your answer to the Case Assignment concerning inflation or deflation, and then prepare a two to three page paper describeing how your prediction of inflation or deflation will affect your personal investment decisions. Take into account any decisions regarding home ownership, refinancing a home, putting more money in a bank, or investing in the stock market. Feel free to consider other investment options as well.

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  • Category:- Basic Finance
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