Discussion Board 10 - ECO2013 Essay Example | Topics and Well Written Essays - 250 words

Discussion Board 10 - ECO2013 - Essay ExampleAccording to a track published by Prezi, a loaf of lucre in the 1950s costs some 12 to 14 cents while in 2012, it costs around $2 to $4 per loaf (Mooney). Thats about a 200 to 350% amplification in price from 1950 to 2012 Meanwhile, the US Department of Labor shows that the price of bread has decreased from $2 to $4 to $1.411 in January 2013, but this figure is still more expensive than the 1950 prices.One may be shocked at the increase in the price of bread if one fronts at actual prices of the commodity. But what few people realize is that 2013 prices of commodities cannot be compared directly to prices in the 1950s because of the differences in the economic conditions in these two time periods. For one, gross domestic income is different country population sharing the gross domestic income is also different. Hence, in club to determine whether prices of commodities have actually increased (hence leading to lesser capability to pur chase the same bundle of goods previously purchased), in that location is a need to look at the overall state of the economy. This is best explained by Michael Sivy in his article for Time Magazine. Sivy says, Price hikes for a particular item here or there dont qualify as inflation. If one thing gets more expensive but something else gets cheaper, thats what economists call a relative price budge. Such condition does not signal that it has become more difficult for citizens to purchase items they need. Meanwhile, Sivy says that inflation is an increase in prices across the board which can impact consumers as well as businesses. With high inflation, businesses find it more expensive to produce the same amount of goods it used to produce. If a business were to survive, it can get hold of either to cut down its production, or to increase its costs of production. In both situations, it could affect the overall economy as it translates to over all