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Orlov [11]
4 years ago
15

Under ideal conditions inflation should not have any blurring effect on price signals. If wages and prices are rising at a const

ant 20% then individuals should be able to adjust their expectations accordingly. For example, if the price of bread increased by 20% and the price of the input flour also rose by 20%, the sellers should know that the real price of bread has not changed. The market equilibrium quantity and price has not changed. Why does inflation in the real world result in shortages and surpluses?
Business
1 answer:
fgiga [73]4 years ago
5 0

Answer:

1. Adjustments of or changes in price are not smooth or synchronized.

2. Inflation rarely have impact on the prices of inputs.

3. The concentration of sellers is more on nominal prices of goods than real prices.

Explanation:

Inflation can be described as a sustained increase in the general price level of commodities within a country over a period of time.

The following are the reasons inflation in the real world result in shortages and surpluses:

1. Adjustmensts of or changes in price are not smooth or synchronized.

2. Inflation rarely have impact on the prices of inputs.

3. The concentration of sellers is more on nominal prices of goods than real prices.

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A sales contest can be defined as a short-term incentive program developed or created by a business entity to motivate its sales personnels in order to achieve specific sales objectives and targets.

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3 years ago
"A retired customer that has a portfolio of blue chip stocks is looking to supplement his retirement income. An appropriate reco
NeTakaya

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