

Inflation In One Page - kirubakaran
http://www.scribd.com/vacuum?url=http://www.fee.org/pdf/the-freeman/hazlitt1104e.pdf

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run4yourlives
Ouch.

Explain my hypothetical case to me using the constructs of this "article".

1\. I sell widgets. My factory can make 1000 a month.

2\. On Tuesday, I sell 100 widgets at $1 each.

3\. On Wednesday, my widgets are featured on the news.

4\. On Thursday, I sell 800.

5\. I realize that I'm going to need more widgets! I decide to start selling
them for $2 to cut demand a little, and to profit a little.

This is a demonstration of inflation, yet it has absolutely nothing to do with
the money supply, but everything to do with the demand for my widget. For
macro-sizing, see: oil.

Here's a better one-page explanation of inflation:
<http://en.wikipedia.org/wiki/Inflation>

~~~
kirubakaran
From the link you kindly provided, your hypothetical case is not inflation.

 _Although "inflation" is sometimes used to refer to a rise in the prices of a
specific set of goods or services, a rise in prices of one set (such as food)
without a rise in others (such as wages) is not included in the original
meaning of the word. Inflation can be thought of as a decrease in the value of
the unit of currency._

~~~
run4yourlives
>"Measuring inflation requires finding objective ways of separating out
changes in nominal prices from other influences related to real activity. In
the simplest possible case, if the price of a 10 oz. can of corn changes from
$0.90 to $1.00 over the course of a year, with no change in quality, then this
price change represents inflation. But we are usually more interested in
knowing how the overall cost of living changes, and therefore instead of
looking at the change in price of one good, we want to know how the price of a
large 'basket' of goods and services changes."

Basically, I'm trying to point out that inflation is a hotly contested complex
term, which we are currently demonstrating by linking to different sections of
the same entry that somewhat contradict.

It is far to large a topic to be understood in a one page primer that states:
"Government prints too much money."

------
kirubakaran
pdf : <http://www.fee.org/pdf/the-freeman/hazlitt1104e.pdf>

