How to respond to the following?

a) Inflation is when the average of prices related to goods or services increase over time causing an increase in the price index which is where the percentage of inflation comes from. Inflation starts to erode the economy by increasing the money needed to purchase an item that may have been significantly less a month ago such as gas which is also changed by negative externalities that don't typically involve U.S. citizens. It also affects people because they have less money to spend. The money they have would be worth less than it was and with increased taxes from the government to continue making advancements or to fund projects, people would start experiencing more financial hardship. On the contrary, the government could start borrowing money however, "that might leave less borrowing available for businesses to tap when they want to expand their operations (and create jobs) or for us when we want to buy a new car or house" (Walters et al., 2013, p. 16).

b) Inflation is tough for anyone who is on a fixed income, low income, investing, or people who try to save money. These things don't increase with inflation so they now have less to use to spend. The government does try to combat this damage by providing incentives for different things because "economic meltdowns that lead to idle resources usually result in calls for more government spending to "prime the pump"(Walters et al., 2013, p. 15)

c) You can protect yourself from inflation by using a good marginal analysis of the situation. If you save lots of cash you may want to spend that cash on a physical asset that can outlast a movement in inflation such as gold, real estate, and sometimes stocks as these are changed more by demand it seems that inflation itself. If that is something you don't have the finances to support than making a budget that provides you with all the necessary things you need would also be a great idea.