Margin Creep

And finance Allah shmoop What is the rial balance effect

Riding a unit cycle on a tightrope walking home from

a raucous New Year's Eve party Examples of one kind

of real balance of that Yeah well another kind relates

to economic decisions Well the real battle Its effect has

to do with the purchasing power of money It posits

that a change in price levels alters how much stuff

you can buy that is assuming your income remains the

same while you make four grand a month Take out

taxes and rent and utilities and insurance and all the

other basic stuff that eats away at your disposable income

Now you have fifteen hundred dollars left in cash to

you know spend on stuff each month but you still

have to eat You know because of a rare gastro

intestinal disorder you have to eat special snails with every

meal There's a certain enzyme that your body can't produce

That only comes from this particular natural snail meat Yes

eat them or die So snail smoothies for breakfast Snail

sandwiches for lunch Snail ala King for dinner and for

a late night snack Deep fried snail poppers Well the

snails you need are usually eight bucks a pound In

a typical month you spend about four hundred dollars on

them which leaves you eleven hundred dollars out of your

budget for you know stuff money Teo You know go

to the movies or buy video games or purchase gold

grills for your teeth Like Ryan locked Yeah whatever else

you need but this month you get bad news There's

been an outbreak of rare snail Ebola that has ravaged

the population of the special snails You need thio survive

Well the number of snails available has plummeted in response

prices double right Demand is the same and supply is

down so prices go up What used to cost eight

bucks a pound now cost sixteen bucks a pound And

instead of four hundred dollars well this month your snail

fix will cost you eight hundred It cuts into your

other spending You usedto have eleven hundred dollars for everything

else Now you've got just seven hundred You'll have to

cut back on your non snail expenditures Yeah Sorry Real

balance effect at work here people Basically if prices go

up and income remains the same consumption expenditures after decline

You just can't buy as much with the money you

have All right well you'll have to economize this month

on ly streaming movies replay old video games brass grills

for the time being for your teeth there At least

until they ramp up those experimental snail farms You know

where Find a cure for snail Ebola Let's just hope 00:02:23.7 --> [endTime] it stays with the snails eh