Plz add your explanation. The following people spent their money during differen
ID: 1145154 • Letter: P
Question
Plz add your explanation.
The following people spent their money during different time periods. Label each of their scenarios as to whether they bought their goods during a time of inflation, deflation, or price stability Peter is a compulsive gamer. He decides to buy World of Warcraft, all of its expansions, Starcraft 2, a PS3, a Wii, and an Xbox 360 since prices in general have been rising at an alarming rate Melissa decides to start her own personal library and chooses to amass a private collection of books and magazines about world religions, cooking, comics, and economics. As she reads an issue of The Economist, she discovers overall price levels have changed only 0.01% in the past 2 years and decides it doesn't matter whether she starts the project now or later nes her wedding even t gh most food prices and most service prices Linda were dropping this year, which would help keep the cost of the wedding down Inflation Deflation Price Stability Out of these individuals, whose money gained the most value during their time period? O Peter O Melissa O Linda O All three had equal gainsExplanation / Answer
Inflation is the increase in general price index. Peter bought the commodities when prices have been rising leading inflation in the market.
Mellissa case, price have changed only 0.01% in past 2 years and doesnot matter whether to start the project now or later because price is stable and Mellissa money value doesnot change
Linda case there is deflation because of decrease in prices.
Money value increases when there is deflation. Thus Linda money gains the maximum value