the real income of the users of that product fall.
it rises
RUNNING INFLATION: "It refers to the situation where the price level rises very fast. In case, price level doubles up every 3 years. It is, generally, succeeded by galloping inflation"
Inflation.
You have an inelastic product.
Characteristics of inflation are: Inflation involves a process of the persistent rise in prices. It involves rising trend in price level. Inflation is a state of disequilibrium. Inflation is scarcity oriented. Inflation is dynamic in nature. Inflationary price rise is persistent and irreversible. Inflation is caused by excess demand in relation to supply of all types of goods and services. Inflation is a purely monetary phenomenon. Inflation is a post full employment phenomenon. Inflation is a long-term process
it rises
The general price of goods and services rises.
RUNNING INFLATION: "It refers to the situation where the price level rises very fast. In case, price level doubles up every 3 years. It is, generally, succeeded by galloping inflation"
Inflation.
You have an inelastic product.
Characteristics of inflation are: Inflation involves a process of the persistent rise in prices. It involves rising trend in price level. Inflation is a state of disequilibrium. Inflation is scarcity oriented. Inflation is dynamic in nature. Inflationary price rise is persistent and irreversible. Inflation is caused by excess demand in relation to supply of all types of goods and services. Inflation is a purely monetary phenomenon. Inflation is a post full employment phenomenon. Inflation is a long-term process
If the Gross Domestic Product rises and the inflation drops there will be more jobs and more cleaner environmental companies that will benefit. The DOW, service and food industries, and other industrial companies will also rise.
reflation
A demand for a product is when a customer expresses a desire or willingness to purchase a product. It is the amount of a product that customers are willing to buy at a specific price. Generally the demand for a product is determined by the price of the product the customers income the availability of a substitute and the customers preferences. When the price rises demand falls and when the price decreases demand increases.Factors that affect the demand for a product include: Price of the product Customers income Availability of a substitute Customers preferencesIf the price of the product rises then the demand for the product falls and vice versa. This is due to the fact that customers are willing to pay a certain price for a product and when the price increases customers will be less likely to purchase the product.
the price of things has risen while your salary did not, meaning you have lesser number of items you can buy with the money you have as compared to what you could have bought before inflation.
Supply & Demand, EconomicsEconomic studies tell us that when the price of a good drops, demand will rise. Furthermore, when the price of a good rises, demand will go down.
when the supply of a commodity increases but demand remains constant then price of the commodity falls which is called deflation with the result unemployment rises.on the other hand if supply rises and if demand also rises with same rate then this would have positive effect on the economy as the employment rises with out inflation.