Michael Chang buys only tennis rackets during a particular year.During the year in question,the price of all goods rises by 10% on average,but the price of tennis rackets remains the same.Which statement is correct?
A) Michael benefits from inflation.
B) Michael does not experience inflation because he only buys tennis racquets.
C) No matter what Michael buys, he experiences inflation.
D) Michael does not benefit from inflation.
E) We can't conclude anything from the information given.

Question

Quizplus · Accepted Answer

Michael does not experience inflation because he only buys tennis rackets, and their price remains the same. While the average price of all goods rises by 10%, this does not affect Michael's purchasing power since the price of the only good he buys doesn't change. Therefore, he does not benefit from inflation, nor does he suffer from it.

Michael Chang Buys Only Tennis Rackets During a Particular Year