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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

If, over time, wages and salaries on average rise at least as fast as inflation, why do people worry about how inflation affects incomes?

To determine

To demonstrate:Theeffect of Inflation rate over the income of a person.

Explanation

As we have already discussed, if inflation rate is high, more currency is needed to avail the goods and services at that high rate. Hence disposable income of the consumers’ needs to be high for them to easily purchase the goods and services.

Over a period,wages and salaries also increase with inflation, but the change in wages is not as immediate as the change in Income...

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