Yeah, demand and supply are very important factors, but demand and supply isn't just... Oh, 10 people want demonic, but there are only 5 sets out there, so the price is a bit high. Economists usually use this term... Ceteris Paribus, meaning other things equal. If you say all other things equal, supply and demand itself have many factors WITHIN them still. In Macroeconomics, aggregate supply and demand makes life much easier... But guess what's in aggregate demand! Consumer spending, investment spending, government spending, and net exports (there's also other ways of calculating, but wages, profits, income, and rents is one of the other ways). Oh, and aggregate demand is GDP. Now, what am I rambling about? Here's where you get your mind blown
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Based on what I've learned, because we are going towards an inflationary gap, we're going to have chaos in PL soon, if it hasn't already happened. Oh, why do we have an inflationary gap? Seems like people are farming too much... Increasing the money supply too fast. When the money supply goes up, the money supply/demand laws would show that interest rates go down... What happens when interest rates go down? People invest more in terms of gear. When people invest more in gear, aggregate demand goes up... BUT WAIIITTTT!! THIS IS A GAME!! THAT MEANS THAT'S ALSO CONSUMER SPENDING!! So we have a crazy rise in the price level and soon, we will have 30m sets. StS isn't going to change anything in PL, so money's just going to become worth less and less. Noobs may never have the chance to become rich unless they get lucky. The rich become richer and the poor become poorer.
Eh, I don't even know half of what I typed there... I'm kinda brain dead and I just got a 5 on my AP test. Sorry, a bit confident.
Originally Posted by Noodleleg
Yeah, demand and supply are very important factors, but demand and supply isn't just... Oh, 10 people want demonic, but there are only 5 sets out there, so the price is a bit high. Economists usually use this term... Ceteris Paribus, meaning other things equal. If you say all other things equal, supply and demand itself have many factors WITHIN them still. In Macroeconomics, aggregate supply and demand makes life much easier... But guess what's in aggregate demand! Consumer spending, investment spending, government spending, and net exports (there's also other ways of calculating, but wages, profits, income, and rents is one of the other ways). Oh, and aggregate demand is GDP. Now, what am I rambling about? Here's where you get your mind blown
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