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Vilsue t1_iy0e7nv wrote

i never tried to explain politics and marcroeconomy to 5 year old but here it goes:

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Your mom gives you and your brother a dollar everyday

You both want spend it all on candy

Your brother found a place where he can buy candy cheaper than you and keeps it a secret (or you just can't go to same store). You complain to your mom and you get more money

Sometimes your mom gives more money to you, sometimes more money to your brother

You negotiate amout of money you will receve from your mom every month based on behaviour

Your brother started stockpile of candy so he can sell it to you for profit

In response you also started a stockpile of candy to sell to your brother

You both sell it only when it benefits seller most

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You start give each other a credit in candy and extort services like washing dishes on mowing the lawn on each other when you can't pay back

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Effectively price of candy fluctuates over time and depends on how much candy you want to eat given month

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MotsPassant t1_iy1ajta wrote

I don't think that answers the question

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Vilsue t1_iy35fhy wrote

mom is the world bank/general population (the basic source of money)

candy is any commodity like oil

you and your brother are contries/goverments

Stores are commodity producing countries, you are banned from buying in specific places because of politics/sanctions/ custom duties

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How is it not eli5?

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MotsPassant t1_iy3fyuf wrote

I didn't say it was not eli5, I said it doesn't answer the question. You tried to explain why prices fluctuate, not how companies can predict the prices accurately.

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Vilsue t1_iy5r5il wrote

oh, they just use mathematical models like regresion analysis

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