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【B1】 [br] 【B2】 [originaltext]Yesterday we discussed the problem of rising prices
【B1】 [br] 【B2】 [originaltext]Yesterday we discussed the problem of rising prices
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2023-08-01
16
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【B1】 [br] 【B2】
Yesterday we discussed the problem of rising prices. In other words, or in the economist’s terms, it is regarded as inflation. We noted that, during the periods of inflation, all prices and incomes do not rise at the same rate. Some incomes rise more slowly than the cost of living, and a few do not rise at all. Other incomes, though, rise more rapidly than the cost of living.
We concluded that persons with fixed incomes, as for example, the elderly who depend upon pensions, a person with slow-rising incomes as, for example, an employee with a salary agreed to in a long-term contract; will be most seriously affected by inflation. Please recall that while their dollar incomes stay the same, the cost of goods and services rises, and in effect, real income decreases; that is they are able to purchase less with the same amount of money.
We also talked about the fact that manufacturers and persons with business interests and investments would probably benefit most from inflation, since high prices would increase sales and profits would likely rise faster then the cost of living.
And now, before we begin today’s lecture, are there any questions about the term inflation or any of the examples given in our discussion so far?
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