What is the difference between inflation rate and cost of living, or are they the same?
The cost of living refers to how much, in dollars, it costs to maintain a certain standard of living. You usually use it to compare two different areas. For example, you could say that if your cost of living in Seattle were $40,000 a year, in San Francisco living in the exact same way (an equivalently-sized apartment, the same quality of food, using the same amount of gas, attending the same number of movies, etc) would cost you about $70,000. If the cost of living in an area goes up, that means you need more money to live there. This is similar to, but a different idea from, inflation. Inflation is when the value of money goes down. If it takes $1 to buy a loaf of bread in one year, and it takes $2 to buy a loaf of bread another year, then this may be 100% annual inflation (or maybe bread is more expensive now). Inflation is across the board, though, so your $1 would buy half as much gold, half as much property, half as many gumballs, etc. Inflation is sort of a measurement of how qui
