00:01
Okay, so here we're going to be looking at the concept of inflation and we're basically going to answer a simple question here.
00:09
Before we ask the question, we want to define inflation, the definition of inflation.
00:16
We understand that there's basically persistent increase in the general price levels, increase in the general price.
00:39
Levels of goods and services.
00:47
Okay, so with this definition, we can then understand that these causes, different causes of inflation, primarily we look at what is known as the demand pool inflation, and we look at supply, or on the supply side, we have cost push inflation.
01:09
So those are the primary methods, or the primary ways prices tend to increase.
01:16
But we're basically looking at a question here to say, is it possible to receive wage increase and the real income may not increase? okay, so we have real, okay, we start off with the nominal wage.
01:39
Is actually based on what you are given at that moment, the monetary value of the income.
01:49
But when it comes to real wage, this takes into account the inflation rate.
01:58
So in terms of formula, one can actually simply say, just look at the analysis separately.
02:06
So real wages are basically equal to the nominal minus the inflation rate.
02:22
Okay, so basically that is so it's possible that the real wages may not necessarily increase while the nominal wage has increased.
02:36
We can just give us a simple example here.
02:39
So, for example, the nominal wage has gone up to 0 .7 % while inflation has gone up by 3%...
