But we can’t ignore the fact that nominal wages have always varied over time, and that the supply curve for goods tends to flatten out at some point.
This is because the supply curve is a little like the price curve. The price of a good can fluctuate with the price of the money you have to pay for it. For instance, the price of a gallon of gas can increase with the price of oil or oil’s costs to transport it. But the supply of oil doesn’t increase in proportion to the price of the gas.
What happens when your nominal wages goes up is that supply for goods goes up. That means that the price of the good goes up. The price of oil goes up. That means we have to buy more oil, or the price of gas goes up to compensate for the price of oil. And we always have the option of buying it at the lower price.
The price of energy in the United States went up by $2.50 a gallon in the middle of 2013. That’s a huge jump, but if you’re thinking, “how could that happen?” then you’re missing the big picture. There’s a lot of speculation about what the cause might be. We’re talking about a major and important industry that we’re spending billions of dollars to support.
Well, oil prices go up because the price of energy goes up, right? So if youre a small company, youre getting hit with a major long term supply curve. In the short run, the price of oil is driven by the supply of oil. In the long run, the price of oil is driven by the demand for oil, and the supply curve is driven by the demand curve.
In the short run, you end up getting hit with a supply curve because oil prices increase because the price of oil goes up because of population growth. In the long run, the supply curve is driven by population growth, the demand curve is driven by the cost of living, and the price of oil is driven by oil consumption.
If you want to get by on the short run and get by on the long run, the price of oil goes up because you have to replace the supply curve with a supply curve. But if those supply curves are not linear, they don’t go according to the demand curve. If the supply curve is linear, the demand curve goes according to the demand curve.
If you want to get by on the long run, you will need to import a lot of stuff. But that doesn’t mean there isn’t a supply curve. A better question is how you build your supply curve instead of just relying on the growth in population to support your economy.
The way I look at it is that nominal wage growth can be used to make up for a shortfall of supply. That is to say, the supply curve will not be linear, but the demand curve will be. As the demand curve increases, so does the supply curve. So if your nominal wages are not rising fast enough, but you want to continue growing the economy, you need to build a lot of stuff, and so too will the supply curve.
If you’re doing a good job of increasing the nominal wage growth, you can find yourself in a great position as the economy grows and as the supply curve increases. This is because as you grow the economy, you will have to pay your workers more, which will cause the demand curve to increase. The demand curve can also cause you to pay your workers less, which will cause the supply curve to decrease.