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September 13, 2025, 08:23:46 am
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Author Topic: Disposable Income and the Rate of Inflation  (Read 4411 times)  Share 

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william.woon

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Disposable Income and the Rate of Inflation
« on: May 10, 2014, 05:32:17 pm »
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Hey Guys, got a question here. If disposable income increases then inflation would increase due to demand-pull inflation. But if there was a reduction in disposable income it would reduce inflation, and possible go into a deflation. Is that right?
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Jono_CP

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Re: Disposable Income and the Rate of Inflation
« Reply #1 on: May 10, 2014, 07:06:10 pm »
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Mine wouldn't be a researched response, but I would presume that a reduction in disposable income or otherwise known as 'money after tax', would reduce inflation as there is a decrease in consumer sentiment about the capitalist/socialist economy.
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william.woon

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Re: Disposable Income and the Rate of Inflation
« Reply #2 on: May 10, 2014, 07:46:26 pm »
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I would think so too, thanks for your respond man appreciated!
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chasej

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Re: Disposable Income and the Rate of Inflation
« Reply #3 on: May 11, 2014, 04:45:24 pm »
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Quote from: william.woon on May 10, 2014, 07:46:26 pm
I would think so too, thanks for your respond man appreciated!

Yes, it would decrease demand inflation, however keep in mind deflation would be very rare as most companies would be unwilling to decrease their prices due to simply a small tax increase reducing some demand (essentally companies which sell essential items such as electricity).

Never say something would cause deflation unless it obviously would actually reduce average prices over time, if prices aren't reducing, the rate of inflation is merely decreasing (i.e. prices are increasing but at a lower rate than before).
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Summers

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Re: Disposable Income and the Rate of Inflation
« Reply #4 on: May 11, 2014, 05:00:45 pm »
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Why are you even doing this in your unit 1? like wtf. I'm doing that now in 3/4 and don't really know what I'm doing! LOL!
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Jono_CP

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Re: Disposable Income and the Rate of Inflation
« Reply #5 on: May 11, 2014, 05:32:42 pm »
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Inflation is much easier than supply and demand though. The former caters for those who study whilst the latter is just natural talent
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Jono_CP

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Re: Disposable Income and the Rate of Inflation
« Reply #6 on: May 11, 2014, 05:36:23 pm »
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Perhaps it is subjective; but that is my view. Supply and demand just gets on my nerves...
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william.woon

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Re: Disposable Income and the Rate of Inflation
« Reply #7 on: May 13, 2014, 10:54:00 pm »
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Yeah doing it in Unit 1 *facepalm*, but I suppose that'll help us in Unit 3. Anyways thanks to everyone who commented on this post really helped clarify my answer and gave me a clearer understanding. Thank you all!
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chasej

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Re: Disposable Income and the Rate of Inflation
« Reply #8 on: May 13, 2014, 10:59:29 pm »
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Quote from: william.woon on May 13, 2014, 10:54:00 pm
Yeah doing it in Unit 1 *facepalm*, but I suppose that'll help us in Unit 3. Anyways thanks to everyone who commented on this post really helped clarify my answer and gave me a clearer understanding. Thank you all!

Units 1/2 and unit 3 cover really similar content. It really does you well to learn 1/2 well, as just by doing that you have at least 1 third of U3 downpat and the rest is easy to follow on with.
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william.woon

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Re: Disposable Income and the Rate of Inflation
« Reply #9 on: May 13, 2014, 11:01:17 pm »
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Yeah thats what I'm thinking of doing. To do as much work possible in Unit 1 & 2 because your not in such tight deadlines so I'll have a better Understanding of Unit 3 & 4 and won't struggle that much.
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chasej

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Re: Disposable Income and the Rate of Inflation
« Reply #10 on: May 13, 2014, 11:07:58 pm »
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Quote from: william.woon on May 13, 2014, 11:01:17 pm
Yeah thats what I'm thinking of doing. To do as much work possible in Unit 1 & 2 because your not in such tight deadlines so I'll have a better Understanding of Unit 3 & 4 and won't struggle that much.

Great idea. Don't completly overwork yourself this year though, just treat it as a way to get ahead so do as much as you can without exerting yourself, but remember everything you need to know would be retaught next year anyway, so this year isn't the be all and end all.
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william.woon

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Re: Disposable Income and the Rate of Inflation
« Reply #11 on: May 13, 2014, 11:09:31 pm »
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Quote from: chasej on May 13, 2014, 11:07:58 pm
Great idea. Don't completly overwork yourself this year though, just treat it as a way to get ahead so do as much as you can without exerting yourself, but remember everything you need to know would be retaught next year anyway, so this year isn't the be all and end all.

Indeed that's right. I really appreciate your help and advice to be honest. I suppose we all hope to strive in VCE.
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chasej

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Re: Disposable Income and the Rate of Inflation
« Reply #12 on: May 13, 2014, 11:12:10 pm »
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Quote from: william.woon on May 13, 2014, 11:09:31 pm
Indeed that's right. I really appreciate your help and advice to be honest. I suppose we all hope to strive in VCE.

No problem man. Always happy to help. And definitly, I guess there's no reason why one shouldn't do as well as they possibly can, even if they may get a higher score than needed for their course, hence people go pretty hard.

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william.woon

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Re: Disposable Income and the Rate of Inflation
« Reply #13 on: May 13, 2014, 11:14:24 pm »
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Quote from: chasej on May 13, 2014, 11:12:10 pm
No problem man. Always happy to help. And definitly, I guess there's no reason why one shouldn't do as well as they possibly can, even if they may get a higher score than needed for their course, hence people go pretty hard.



But I suppose when working hard, don't work too hard, still enjoy life and care for your health because if your poor in health I don't see how you'll still be able to strive.
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Jono_CP

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Re: Disposable Income and the Rate of Inflation
« Reply #14 on: May 13, 2014, 11:20:00 pm »
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Fantastic advice chasej, couldn't agree more. Just keep on working at economics, concepts such as GDP, economic growth, material and non-material living standards, supply and demand, microeconomics and macroeconomics are just reoccurring themes. Unit 1 + 2 helps greatly for 3/4 except I stuffed up supply and demand this year grrrrr, year 12...

No worries william, it's good to see that you are in Year 11 but being proactive anyway. This will hold you in good stead for now and into the future :)
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