True or False? Inflation devalues wages.

LMAO!!! Just admit you don't know what you are talking about. This is some really easy stuff. It's a simple equation. Nothing about that equation says increasing O puts downward pressure on P, lol.

 

It says P increasing means O does not increase as much as it otherwise would have. Take the instance in my previous equation:

dO/dt = dM/dt + dV/dt - dP/dt
dO/dt = 3 - dP/dt

When prices increase, dP/dt > 0. So set it to a positive number like 1: dO/dt=1.
When prices are constant, dP/dt = 0. dO/dt = 3.
When prices decrease, dP/dt < 0. So set it to a negative number like -1: dO/dt = 4.

 

Yes, when you define dM/dt + dV/dt and increase dP/dt, dO/dt will go down. This is basic mathematics here. The fact you are going this far in this simple conversation is hilarious. You still realize you are making dM/dt + dV/dt a constant value right. Please tell me you understand that?

 

Yes it does. As prices increase it means people can afford less and less of the necessities they need to survive.

That's called 'substitutions,' dimwit. It's a methodology of the CPI.

I may have a portion drink or MPR that I regularly use. I use it a lot because it is effective and it really helps me. However, I find that the price on these items have gone up so much that it no longer justifies the price. Instead, I choose a cheaper alternative which is not as effective and is not all that great. But according to the CPI, because I choose a poor quality substitute instead of my favorite brand there is no inflation, regardless of whether or not the substitute has gone up as well.

How exactly does it show that there is no inflation if I have to switch my favorite item brand because the price has gone too high?

Yes, we all know that you're out of touch, you live in a fairy tale world and you believe that because you live in the 'World's Richest Economy' means that everyone is rich. It actually makes me happy that there are people who think the way you do. Oblivious to suffering and struggle. Not to many people can actually say they they bought eggs and that it cost 'only a couple of bucks.' It's pretty obvious you've never worked in retail, you would know that customers are consistently clipping coupons and looking out for sales.

I'll give you a hint as you why that is. It's not because the items they want are 'cheap.'

Again, that's how people who measure the price increase of goods when determining inflation. They take a basket, determine it buy it's importance and average it. It's the basic flowchart on how to measure inflation. This should have been taught to you as early as Econ 102.

I especially love the last sentence, as it shows that you were probably better off not paying for your economic courses at all. Either way, the guide is posted so even you can learn how to calculate the cost of living. Have fun.

You base the CPI on spending habits. The fact that you believe people are trying to purchase new elections regularly is beyond dumb.

It's an opinion poll. Rising prices is a concern to them. Their wages have only increased nominally and hasn't kept up with inflation at all. It's the reason why they are so concerned with rising prices.

There are a lot of mitigating factors which makes electronics so cheap. Like, the fact that you don't manufacture any of those electronics. Unlike iPhones, Food is actually produced in America and Americans find that their expenses for food is increasing regularly. Aside from the fact that demand for iPhones are at all time lows (I thought you already learned your lesson when talking about Apple), people are choosing cheaper alternatives, such as Android phones and the new Blackberry 10.

Aside from this, if America didn't have such a huge trade deficit, prices for electronics would be increasing along with food and gas. This doesn't change the fact that the cost of living is based on the day to day expenses of the average consumer. iPhones and TVs does not fall into this category.

Sorry, but you're too ill equipped with the economic know-how to do any owning here. You've just become another example of why not to get educated in an American School.

 

That's not what I said. You just keep making up stuff in your head. I said just because you buy them more frequently doesn't make them the largest purchase you make in a year.

That is not called 'substitutions', lol. Chicken is a substitution for Beef. Fruits and vegetables are a group themselves that are not a substitution for anything. You are embarrassing.

Your anecdotal evidence does not persuade me that you know what you are talking about.

When economists talk about CPI they aren't talking about your favorite goods rising in price, lol. You are confusing macroeconomics with your own individual life.

Not everyone is rich here. But we have more rich people than anywhere in the world. In fact we have more millionaires and billionaires than the next 9 countries. Over 12% of our population (which me, my family, and friends are apart of) make over $100,000 a year. Over 50% make over $57,000 a year. We are a wealthy country and all you do is talk about the bottom. Even our poor people are better off than the rest of the world's poor people. We are that wealthy.

Lol! They take any purchase made in a given time period and analyze the price. It does not take frequency in to account, it takes price. 10s of millions of people buy tvs in a given year. Tvs are an actually expense that families in America buy. It does not matter if they don't buy a tv every day but they buy food everyday, lol. It's still a purchase and still part of our CPI.

We are not talking about microeconomics. We are talking about the CPI given for America. Your own individual inflation calculation has nothing to do with our macroeconomy, lol. It's just hilarious how you really think you know what you are talking about. Pretty embarrassing.

We spend 100s of billions of dollars a year on phones, computers, tvs, ipads, etc. They are a major part of our economy. I guess only the poor people don't buy those items, but apparently there is a lot of people in America that can and do afford them. Hahahahaha. You are an embarrassing individual. I personally worry the least about food and gas in my life. I'm much more concerned about going to Vegas, saving for a new house or car, etc. Just like 10s of millions of families in America.

Who cares, there's a lot of stupid people in America... you are not an exception.

Who cares what factors make them cheap, lol. That's not the point of calculating inflation. You are literally insane.

We are the largest economy in the history of mankind. We have a company that sells phones and computers that is larger than your entire economy. I have a feeling America is doing pretty well. Maybe it's just you who is very poor and only associates with poor people. Embarrassing. And I really don't take your opinion of me seriously. You are not the most credible person around here.

 

It proves that an increase in the rate of change of prices yields downward pressure on the rate of change of output.

Of course. That doesn't mean M and V are constant values, as you falsely asserted several times.

 

No it doesn't. Price and Output can increase at the same time by the same amount to infinity.

Sure it does. Do you not understand what a constant is? When you define M and V = 3 and you compare changes in P and O... you are defining M and V as a constant. This is basic math. We learned this in middle school.

 

Here I found this in a K-12 site. Probably still out of your intelligence level but I'll give it a shot.

 

I never said you said it. That's what I'm saying. Regardless, if prices increase it means people can afford less and less of the bare necessities.

No one said Chicken was a substitute for beef. Substitutions are based on a cheaper alternative to the same type of item. It really doesn't take a scholar to understand this. Have you ever heard of Trader Joe's? Have you ever heard of Perdue? Popular, high quality brands. Say these brands became too expensive for one consumer and the consumer decides to purchase a cheaper brand no one has heard of. This is called a 'substitution.'

Let me know where I have lost you...again.

.

It was suppose to teach you how the Government determines inflation using the 'substitution' methodology. It's not a surprise at all that it flew right over your head.

So it's safe to assume you never learned about Hedonics?

Then explain why they added substitutions and hedonic adjustments to the CPI methodology. The purpose of these mechanics is to determine the overall quality of the item and the overall price change for the individual. You are absolutely clueless about how CPI works.

 

Not if their income increases.

Chicken is actually a substitute for beef, lol. I was saying fruits and vegetables are not substitutes themselves but chicken is a substitute for beef. Your lack of economic knowledge is hilarious.

Of course I have. You are building a strawman. I never said anything otherwise. We are talking about CPI here. You are talking about your own personal preferences. I really don't care about your personal preferences.

Strawman. Nothing I said could be confused for saying there is no substitutions. That is you just making stuff up in your head.

We have over 6,000,000 millionaires. Over 30,000,000 people making over $100,000. I'm glad you just focused on the 357 billionaires. We are the wealthiest nation this world has ever seen. You are only focusing on the bottom like the bottom feeder you are.

1% is uber wealthy. 10% of our country makes over $100,000. To the world, that is still wealthy. We are just so wealthy that our wealthy change the definition of wealth. My economic education is fine. Someone arguing that Hong Kong has a better economy than America... now that is a telltale sign you aren't dealing with an educated individual. Your jealousy of America is very apparent in almost everything you say.

TVs were a simple example. Combine TVs, clothes, furniture, phones, internet service, gym memberships, etc, etc... and you are talking a much larger % than 4%. But, I realize you are poor so you only care about poor people goods.

I agree, the BLS does not disagree with me.

Apple sold over 50,000,000 iphones in America alone in 2012. There were 10s of millions of tvs, phones, cameras, etc bought by American's. We are rich, we buy a lot of crap. I personally have 4 tvs, including a 65 inch flat screen for my main entertainment, two laptops, iphone, ipad 1 and 2, etc. It's what we do in America because we are so rich. Even poor people have iphones here.

Clothes aren't rising in prices either. Neither is hotel rooms, used cars, etc. The CPI isn't a CPI for poor people, it's a macroeconomic indicator of many goods across many industries. Just because your primary focus is on poor people, doesn't mean that's what the CPI should be.

It's embarrassing to be poor and stubborn. You should not be so arrogant about your economic theories because they make you come off as very uneducated. I can tell you have never taken a single economics class in your life. Being poor is not bad, being poor and like you is horrible.

Kim Kardashian has many more followers than you. Doesn't make her an expert in economics. Plus I can put up a fake picture of a girl myself and catfish some fools to be my friends. We all know you are a 50 year old fat asian dude who has a beef with America and it's greatness! You're not fooling anyone.

 

lol

Funny stuff...

 

Can you please finally apologize and admit that you were wrong. 100 out of 100 freshman in high school would know that you are wrong.

 

I have to agree with you on that one. I will argue that inflation may not devalue wages because wages can increase faster than inflation, in which case they have not devalued.

But to say that inflation doesn't devalue money is just silly. When prices rise, the dollar can buy less stuff, and it has in fact been devalued in purchasing power.

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I have to say, you look like a complete idiot when you go around demanding other apologize and admit they are wrong, especially given how many times you've been completely wrong.

 

I'd be mad if I took the butt kicking you took yesterday also.

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You took it out of context like always...

Inflation doesn't devalue money. It is a measurement. People paying more for goods and services causes money to devalue when compared to a previous point in time. So inflation devalues money is not a factual statement.

 

I took no butt kicking. Are you referring to the thread where I exposed your silly argument that banks don't need reserves to lend money?

Suit yourself.

LOL, classic akphidelt. Saying two completely opposite things at the same time.

 

You got destroyed pretty badly. It got embarrassing. Moving your argument all over the place, getting desperate, etc. Felt bad for you man.

Not at all. Your ability to comprehend things is just at a really immature and uneducated level. Which is why you get along with Dr R and Ethereal. Two of the more embarrassing humans on this site. You fit right in!

 

Maybe you smarmy self-serving proclamations impress others. Juveniles do that. But they don't impress me. To me, they make you look like an idiot. Others can decide for themselves.

 

Dude, a simple apology would do. Now you are just digging your grave even deeper. It's pretty obviously you got it handed to you yesterday and now you are a little butt hurt. I honestly don't care what people on this forum say... it is honestly a place for comedy more than intellectual debating. The stuff you guys say is pure comedic gold. Free entertainment, 24/7. The fact you still believe banks need reserves to make loans after being told by your own sources they don't is one of the funnier things I've witnessed. Along with Dr R making up his own mathematics, the one clown arguing about Botswana being a better economy than America, and that one Joselyn 50 year old man saying Hong Kong is better than America and America really isn't that big.

Congrats buddy! You made the list of clowns.

 

Maybe you smarmy self-serving proclamations impress others. Juveniles do that. But they don't impress me. To me, they make you look like an idiot. Others can decide for themselves.

 

Resorting to 5 year old tactics... nice! Fits you well.

 

Maybe you smarmy self-serving proclamations impress others. Juveniles do that. But they don't impress me. To me, they make you look like an idiot. Others can decide for themselves.

 

Sure it does. Take the instance in my previous equation:

dO/dt = dM/dt + dV/dt - dP/dt
dO/dt = 3 - dP/dt

When prices increase, dP/dt > 0. So set it to a positive number like 1: dO/dt=1.
When prices are constant, dP/dt = 0. dO/dt = 3.
When prices decrease, dP/dt < 0. So set it to a negative number like -1: dO/dt = 4.

dO/dt, or the rate of change of output, is lower when prices are increasing than it is when prices are constant or decreasing. That means that output does not go as high when prices are increasing as it would have otherwise gone had prices been constant or decreasing. The reason is because increasing prices put downward pressure on the rate of change of output.

Not only does the math support it, but it's basic logic and common sense. Everybody benefits from decreasing prices and increasing economic output. Increasing prices cause the economy to not grow as fast as it would if prices were constant or decreasing. If prices are rising fast enough, it can cause a recession like we saw in the 70s. The reason is because increasing prices put downward pressure on the rate of change of output.

Doesn't disprove anything I've said.

Of course I do. Do you not understand what a derivative is?

Either show me where in my equation I defined M and V = 3, admit you're lying about my position, or shut the (*)(*)(*)(*) up.

 

In the real world, a bank's lending is not normally constrained by the amount of excess reserves it has at any given moment. Rather, loans are made, or not made, depending on the bank's credit policies

http://www.rayservers.com/images/ModernMoneyMechanics.pdf


I'd be mad if I were you too

 

Your baseless say-so that I am wrong is not good enough for me or the folks reading this thread.