Imagine you and your friends are running a lemonade stand. When everyone is happy, it’s easy to agree on prices, but when things get hard, like when the weather turns bad or your lemon supply runs out, you might all want to raise your prices at once, even if that means people have less money to spend.
Examples
- People still buy food even if they have less money
- Raising wages can make things more expensive for everyone
Ask a question
See also
- Why Do Inflation Rates Fluctuate?
- Why Do Inflation Rates Feel So Random?
- Why Do Inflation Rates Go Up When People Are Broke?
- Why Is Inflation Like a Broken Scale?
- Why Do Inflation Rates Happen So Suddenly?