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To: Southack

Inflation is NOT prices. It is an increase in the stock of money. The overall level of prices tends to rise when there are more dollars chasing the same amount of goods. Prices do not rise uniformly and some will even fall as people shift their buying habits. Wages and salaries are the last prices to rise in an inflation and may actually fall for some people as people lose their jobs (leaving the same people chasing fewer jobs) due to the increasing inefficiency of pricing because of the inflation. Price dislocations are a result of inflation. They are not, themselves, inflation. You can’t actually measure inflation by price changes but you can tell if inflation is occurring.


63 posted on 06/14/2010 5:14:39 AM PDT by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
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To: arthurus

If salaries are falling, then you’ve got deflation.


65 posted on 06/14/2010 8:46:03 AM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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