Once consumers recognize that a period of inflation has begun, there is generally an increase in consumer spending. T...
DianaKFebruary 7, 2024
Why A is wrong and E is right
I'm just confused on why E would be the right answer, considering salaries are also increasing during inflation. If salaries are increasing, wouldnt consumers still soend more if their salaries are increasing as well?
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More specifically, it says "salaries are not keeping up with the pace" but it says in the stimulus that they are increasing
Emil-KunkinFebruary 8, 2024
If salaries are not keeping pace with inflation then people are earning less in real terms. If prices rose ten percent but my salary only rises 5 percent, I won't be able to afford as much as I did the prior year. This would explain why people don't make large purchases; they simply are unable to afford it anymore.
