To ascertain: Effect of pure inflation on relative price mentioned in vertical axis of the supply and demand curve diagram.

Question

Inflation is a general rise in the level of prices; however, our measures of inflation collect price information on thousands of goods, and firms set these prices. Most firms set prices as “a mark-up over costs”: P = (W/A) x (1 + z). Use this equation to explain the factors that influence inflation.

Answer 1

Question

Chapter 10.8, Problem 1MQ

To determine

To ascertain:Effect of pure inflation on relative price mentioned in vertical axis of the supply and demand curve diagram.

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