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[Economics] Answer me this about inflation
#36

[Economics] Answer me this about inflation

Quote: (01-31-2013 03:40 AM)ElJefe Wrote:  

Quote: (01-30-2013 04:58 PM)Samseau Wrote:  

Also, the idea that deflation means people won't spend is pure bullshit.

If prices are FALLING, how is it possible that more people won't be buying these cheap goods?

Think about it - if you're running a business, and you lower prices, more people will buy your shit.

Not necessarily.

If you're on the housing market, and you expect prices to drop 10% in the next year, you will wait.

Prices drop.

Now, was that your fault, or was that the market? It becomes a self-fulfilling prophecy.

Who cares how long it takes? The end result: people buy.

And it's not like prices fall forever... eventually a floor is hit and people begin to buy again.

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