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17 August, 03:04

Suppose you sell surfboards for a living, and you expect the price of surfboards to increase at the same rate as inflation; you adjust your prices accordingly. If this does not occur, then it must be true that:

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  1. 17 August, 03:17
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    the relative price of surfboards is changing.

    Explanation:

    Suppose you sell surfboards for a living, and you expect the price of surfboards to increase at the same rate as inflation; you adjust your prices accordingly. If this does not occur, then it must be true that: the relative price of surfboards is changing.

    Relative-price changes arise in market economies as individual prices adjust to the flow of the supply and demand for various goods. Relative-price movements say alot about the scarcity of particular goods and services
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