O 9.2 INFLATION AND TIME TRAVEL: THE VALUE OF MONEY OVER TIME In 1979, the federal minimum wage in the United States was $2.90 per hour. By 2019, that number increased to $7.25 an hour. While there is a clear increase in the minimum wage in dollars, it is hard to compare the two figures without knowing more about how the economy changed between 1979 and 2019. In this activity, we will explore different ways to compare the value of money across different time periods. Economists define inflation as the rise of price levels in the economy over time. The average yearly rate of inflation between 1979 and 2019 was 3.2%. That means prices of goods and services went up by an average of 3.2% every year between 1979 and 2019. 1. Suppose that an item cost $1.00 in 1979. What would be the price of that item in 2019 when adjusted for inflation? You can think about this in terms of an investment that compounds interest: if you invested $1.00 in 1979 at 3.2% compound annually, how much would you have in 2019? in 2019 when adjusted