How are people worse off when the price level rises as fast
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How are people worse off when the price level rises as fast as their incomes? How, if possible, could demand-pull inflation occur before an economy was producing at full capacity?
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How are people worse off when the price level rises as fast as their incomes? How, if possible, could demand-pull inflation occur before an economy was producing at full capacity?
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How are people worse off when the price level rises as fast as their incomes? How, if possible, could demand-pull inflation occur before an economy was producing at full capacity?
Answer:
How are people worse off when the price level rises as fast as their incomes?
People aren't actually worse off when the price level rises as fast as their incomes do, although when this occurs people often feel they are now worse off, due to their household consumption bundle. As Gregory Mankiw states in Principles of Economics, "if the bundle that ...
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