The purchasing power of the people also increase which increases the aggregate demand and the prices also increases mean
Answers
Answered by
0
Assume that there is only one chocolate left with the seller , You and two others want that same chocolate . No one is ready to compromise. So what will the shopkeeper do?
He will simply charge higher untill one of you are willing to pay for it. Assume in economy there are 10 people , in which 5 earn salary and 5 don't. Suppose if all 10 start to earn, they all will create demand . Resulting price rise of products in market. Because the demand is more than supply.
Similar questions