International Business: The Challenges of Globalization (9th Edition) (What's New in Management)
International Business: The Challenges of Globalization (9th Edition) (What's New in Management)
9th Edition
ISBN: 9780134729220
Author: John J. Wild, Kenneth L. Wild
Publisher: PEARSON
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Chapter 10.2, Problem 3QS2
Summary Introduction

To Determine:

The impact on purchasing power when growing demand for products outstrips a stagnant supply.

Introduction:

The result for currency supply and demand is inflation. People will have more money to spend on the same amount of products if addition money is injected into an economy that is not producing greater output, as before. Stagnant supply outstrips due to growing demand of products, consumer will have to spend increased amount of money. Therefore, people’s purchasing power is eroded through inflation.

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