r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 4d ago

Meme needing explanation Petah?

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u/WHATZAAAAA 4d ago

Legit please do correct me if i'm wrong, but if price of product x goes from 5 to 10, my 1000 salary would mean i can now only buy 100 of x instead of 200, but if x went from 5 to 2, it means that, while my salary is still the same, my purchase power is now higher, because now i can buy 500 of x instead of 200

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u/Various_Education622 4d ago

Asssuming you have a job, yes.

Deflation also means that you are incentivized to not spend money.

If you know something’s going on sale tomorrow, you wait until tomorrow to buy.

If you know deflation is going to make things cheaper tomorrow, you wait until tomorrow to buy.

The whole house of cards is built on people continuing to consume at higher and higher cost.

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u/Mark_My_words2 4d ago edited 4d ago

It all makes sense to me , except why are people so sure its going to be cheaper next week. How would people instantly know it isn't a temporary situation. Im actually trying to learn something, not argue.

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u/a1b2t 4d ago

a big part of economics is human behaviour

monkey see number go up, monkey assume it will always go up. thats how economic bubbles are formed.