7. Identifying costs of inflation Jin manages a grocery...

7. Identifying costs of inflation Jin manages a grocery store in a country experiencing a high rate of inflation. To keep up with inflation, he spends a lot of time every day updating the prices, printing new price tags, and sending out newspaper inserts advertising the new prices. His employees regularly deal with customer annoyance over the frequent price changes. This is an example of the unit-of-account costs of inflation.

Transcript

00:01 Okay, so i see that you need help with this question, and it says, for each of the following separate situations, determine the associated problem of inflation.

00:08 Answer the questions one to seven in the topics of macroeconomics.

00:13 So for number one, sam is a bookstore owner.

00:15 He has to reprint price tags frequently because the prices of books increase from time to time.

00:21 So for sam, the bookstore owner, the problem of inflation is that it causes frequent changes of prices.

00:30 Problem is frequent changes of prices.

00:42 Okay.

00:44 Which means that he has to constantly update and reprint his tags.

00:50 Constant update to reprint the tags.

01:00 Mary is deciding to start a store selling hand -sewn t -shirts.

01:05 She's very hesitant because the selling prices may not cover the cost of the production in the future.

01:12 So for mary, who is considering starting a t -shirt business, the problem of inflation is the uncertainty.

01:20 So the problem is the uncertainty it creates about future costs and prices, making it difficult to predict whether she can sell her products for profit.

01:50 I did not make any real capital gain from selling stocks.

01:54 Why do i need to pay so much? for the individual who sold stocks, the problem of inflation here is that it can erode the real value of capital gains.

02:15 And yet taxes are often levied on the normal gain.

02:19 Taxes levied on normal gain um not in not accounting for inflation withdrawing money from an atm is convenient also i forgot the atm passwords for the person complaining about the atm withdrawals while this situation does not directly relate to inflation the convenience of withdrawing money or forgetting a password is a separate issue so i would say not inflation why are food prices keep arising is that the country is that the country is producing less and less food or the rise of food prices is just due to inflation for the question rising about rising food prices the problem of inflation is that it can lead to a general increase in prices including food which may not necessarily be due to decrease in food production not not necessarily.

03:39 Oops, that's an l due to food production.

03:46 John receives a 2 % pay raise...

Question

Please give Ace some feedback