Assuming That A Kilo Of Wheat Sold For $1 In 2002 And $3 In 2013, Which Of The Following Can Be Inferred? (2023)

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Assuming That A Kilo Of Wheat Sold For $1 In 2002 And $3 In 2013, Which Of The Following Can Be Inferred? ›

Assuming that a kilo of wheat sold for $1 in 2002 and $3 in 2013, which of the following can be inferred? The purchasing power of the consumers has decreased.

What is the relationship between purchasing power and inflation? Purchasing power decreases with rising inflation. Marketers are attracted to countries with a growing middle class because a nation's: purchasing capability tends to increase as the proportion of middle-income households increases.

Gross domestic product (GDP) is one of the most widely used indicators of economic performance.

Question: Marketers are particularly attracted to countries with a growing middle class because a nation's purchasing capability tends to increase as the proportion of middle-income households increases.

In an inflationary environment, unevenly rising prices inevitably reduce the purchasing power of some consumers, and this erosion of real income is the single biggest cost of inflation. Inflation can also distort purchasing power over time for recipients and payers of fixed interest rates.

Inflation is the rise in prices of goods and services. It causes the purchasing power of a currency to decline, making a representative basket of goods and services increasingly more expensive.

A substitute good is a good that serves the same purpose as another good for consumers. A complementary good is a good that adds value to another good when they are consumed together. Pepsi and Coke are a typical example of substitute goods, whereas fries and ketchup may be considered complements of each other.

Examples of the Substitution Effect

Beef prices rise and consumers respond by purchasing more turkey or chicken. Premium coffee prices at a coffee shop rise, and consumers respond by buying store brand coffee. Price increases in designer pharmaceutical drugs lead consumers to buy generic alternatives.

Suppose, for example, that the price of Ford automobiles goes up. There are many close substitutes for Fords – Chevrolets, Chryslers, Toyotas, and so on. The availability of close substitutes tends to make the demand for Fords more price elastic.

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A for profit organization is a privately owned organization that serves its customers to earn a profit so that it can survive. a nonprofit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal.

Some forecasts put the global middle-class at 5.3 billion people by 2030 and leading the charge in the coming middle-class explosion will be China and India.

Inflation reduces a currency's purchasing power and what that currency can buy. Loss of purchasing power has the effect of an increase in prices. To measure purchasing power in the traditional economic sense, you could compare the price of a good or service against a price index such as the Consumer Price Index (CPI).

Answer and Explanation:

Generally, when the prices increase, money is said to lose value. Therefore, the purchasing power of money will decrease as the level of inflation rises.

Inflation refers to a broad rise in the prices of goods and services across the economy over time, eroding purchasing power for both consumers and businesses. In other words, your dollar (or whatever currency you use for purchases) will not go as far today as it did yesterday.

Inflation affects purchasing power by when the price of something rises, the purchasing power of money decreases.