Michael Chang buys only tennis rackets during a particular year. During the year in question, the price of all goods rises by 10% on average, but the price of tennis rackets remains the same. Which statement is correct? a. Michael benefits from inflation. b. Michael does not experience inflation because he only buys tennis rackets. c. No matter what Michael buys, he experiences inflation. Michael does not benefit from inflation. d. We can't conclude anything from the information given.

Question

Bridger Mclean

Business

13 January, 15:57

Michael Chang buys only tennis rackets during a particular year. During the year in question, the price of all goods rises by 10% on average, but the price of tennis rackets remains the same. Which statement is correct? a. Michael benefits from inflation. b. Michael does not experience inflation because he only buys tennis rackets. c. No matter what Michael buys, he experiences inflation. Michael does not benefit from inflation. d. We can't conclude anything from the information given.

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Answers (1)

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Roy · Answer 1

Michael does not experience inflation because he only buys Tennis rackets

Explanation:

Inflation is defined as increases in price per unit price.

It is the prolonged increase in the price of goods and services caused by devaluation of currency, demand - pull or cost - push. While a certain degree of inflation can be beneficial to a thriving economy, it can become a threat if it becomes larger.

One of the direct impact of inflation is rise in price of goods and services.

As the price of rackets was not affected by the inflation, that means that Michael was not affected by the inflation.