Re: Tesco prices
If wages drop by 5% then people become more price sensitive and so shops have to drop their prices to compete. As one of their major costs, wages, had dropped they will be better able to do this. Chasing price increases with wage increases is one of the major reasons that we are in this mess. Remember that money has no intrinsic value; it is simply the measure of the wealth of a nation. Increasing money supply doesn't make us richer it just means that we have to pay more for the same goods (the goods are worth the same but the money is worth less).
But aren't we all being asked to take a 5% cut to help the economy or is this only for the plebs?
If wages drop by 5% then people become more price sensitive and so shops have to drop their prices to compete. As one of their major costs, wages, had dropped they will be better able to do this. Chasing price increases with wage increases is one of the major reasons that we are in this mess. Remember that money has no intrinsic value; it is simply the measure of the wealth of a nation. Increasing money supply doesn't make us richer it just means that we have to pay more for the same goods (the goods are worth the same but the money is worth less).