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Lecture 7

# SOC101Y1 Lecture Notes - Lecture 7: List Of Years In Zimbabwe

Department
Sociology
Course Code
SOC101Y1
Professor
Sheldon Ungar
Lecture
7

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Nov 30th Lecture 7 Social Stratification Robert Brym
Inequality over 12,000 Years
In Zimbabwe in November 2008, the annualized inflation rate hit 6 sextillion percent (6
sextillion is 6 followed by 21 zeros) the highest inflation rate ever recorded. The
\$100,000,000,000,000 Zimbabwe bill is the highest denomination bill ever printed. This bill was
purchased in Toronto in 2008 for \$12 Canadian. The currency was abandoned by the government
of Zimbabwe in 2009.
Inflation and Real Dollars
Inflation is the increase over time in the cost of a standard basket of goods and services.
Real dollars are nominal * dollars minus inflation (so cost in real dollars is the cost of a
standard basket of goods and services minus inflation, and income in real dollars is nominal
income minus inflation, or purchasing power).

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*nominal = in name only
Illustration
Year 1: a typical basket of goods and services costs \$100.
Year 2: a typical basket of goods and services costs \$105.
Therefore, the annual inflation rate = 5%; \$105 year2 dollars = \$100 year1 dollars
How much are \$100 year2 dollars worth in year1 dollars (i.e., what is the real value or
purchasing power of year2 dollars using year1 as a base)?
The real value of \$100 (year2) is \$95.24 (year1) [x + 0.05x = 100; 1.05x = 100; x = 100/1.05;
x = 95.24]
Check: \$95.24 + 5% = \$100.00
Average Market Income of Canadian Families, Before Taxes and Government Transfers,
1951 to 2004 (in 2003 dollars)
Market income = income before taxes and transfers.
The

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Distribution of After-Tax Income among Families and Unattached Individuals, Canada,
1976 and 2010
Share of Income by Canadas Top 1%, 1920-2007