Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 12

When an economy is experiencing inflation,the prices of most goods and services are rising but at different rates. Imagine a simpler inflationary situation in which all prices,and all wages and incomes,are rising at the same rate,say 5 percent per year. What would happen to consumer choices in such a situation? (Hint: Think about the budget line.)