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And finance Allah shmoop What is the rial balance effect

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Riding a unit cycle on a tightrope walking home from

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

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of real balance of that Yeah well another kind relates

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to economic decisions Well the real battle Its effect has

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to do with the purchasing power of money It posits

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that a change in price levels alters how much stuff

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you can buy that is assuming your income remains the

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same while you make four grand a month Take out

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taxes and rent and utilities and insurance and all the

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other basic stuff that eats away at your disposable income

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Now you have fifteen hundred dollars left in cash to

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you know spend on stuff each month but you still

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have to eat You know because of a rare gastro

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intestinal disorder you have to eat special snails with every

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

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That only comes from this particular natural snail meat Yes

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eat them or die So snail smoothies for breakfast Snail

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sandwiches for lunch Snail ala King for dinner and for

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a late night snack Deep fried snail poppers Well the

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snails you need are usually eight bucks a pound In

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a typical month you spend about four hundred dollars on

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them which leaves you eleven hundred dollars out of your

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budget for you know stuff money Teo You know go

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to the movies or buy video games or purchase gold

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grills for your teeth Like Ryan locked Yeah whatever else

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

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been an outbreak of rare snail Ebola that has ravaged

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the population of the special snails You need thio survive

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Well the number of snails available has plummeted in response

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prices double right Demand is the same and supply is

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down so prices go up What used to cost eight

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bucks a pound now cost sixteen bucks a pound And

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instead of four hundred dollars well this month your snail

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fix will cost you eight hundred It cuts into your

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other spending You usedto have eleven hundred dollars for everything

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

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cut back on your non snail expenditures Yeah Sorry Real

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balance effect at work here people Basically if prices go

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up and income remains the same consumption expenditures after decline

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

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

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on ly streaming movies replay old video games brass grills

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for the time being for your teeth there At least

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until they ramp up those experimental snail farms You know

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

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