Question

you buy a candy bar for 50 cents. a year later, you go to buy the same candy bar and its 55 cents. you still have only 50 cents, but the price of the candy bar has gone up. we can say that inflation is at work. the price of that bar has been inflated. people usually refer to inflation when they talk about the prices of large - ticket items, like cars and houses and stocks. but inflation also affects things like groceries and house supplies. it can also affect things like house payments and rent. when inflation rises but peoples paychecks dont, this means that people have spend more of the money to buy the same things that they used to be able to buy for less. lets go back to the candy bar. you could also say that if you had only 50 cents, you could get only a percentage of that candy bar. in that case, that would be 5/6. now, the store probably wouldnt let you buy only 5/6 of a candy bar anyway, but you can see the point: you have only 5/6 of what that candy bar now costs. your money supply hasnt changed, but the price of what you want has. thats inflation. people can adjust to inflation (the rising price of goods and services) but only when other conditions are met. what has to happen for people?

Explanation:

The text explains inflation using the example of a candy - bar price increase. It states that when inflation rises and paychecks don't, people need to spend more to buy the same things. For people to adjust to inflation, their paychecks need to increase to keep up with the rising prices of goods and services.

Answer:

People's paychecks need to increase to adjust to inflation.