Inflation has ruined one of my go-to examples for my macroeconomics students. Whenever I discuss inflation with my students, I test their understanding of economics by highlighting the puzzle of the Dollar Tree, an American retail chain that sells goods at discount prices. Between the year the Dollar Tree was founded (1985) and today, the price of goods and services have risen 2.63% on average every year.
However, in spite of unpredictable swings in the economy and prices, one store has remained consistent throughout it all. Dollar Tree has long been known for being the last true “dollar store” which […]
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