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Ken Garrett.
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maximus07
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Professor, I did a question earlier but cannot find it so cannot tell exact statement but here it is.
It said that increase in disposable income will bring what type of inflation?
Options were Monetary inflation and Demand Inflation.
I did monetary inflation. Answer was Demand inflation.Now here, I am confused that it can be increase in salary by government so will it be considered increase in money supply? And due increase in salary, people have more demand which resulted in inflation.
Ken Garrett
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Yes, if younhave more money, you will probably spend more. That increases demand and tends to put an upward pressure on prices.
maximus07
Ken GarrettViewing 2 posts - 1 through 2 (of 2 total)
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