Inflationary Expectations

Inflationary Expectations Assignment Help

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Inflationary Expectations

When prices of some goods have been rising and are expected to rise in future as well, these are called inflationary expectations. In such a situation, the consumers will buy more even at the current higher prices to secure themselves against the future price rise. Conversely when prices are continuously falling and people expect them to fall further, they will not buy more at the current low prices. Such expectations about rise or fall in price disturb the normal price- demand inverse relationship and are thus an exception to the law of demand.


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