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Nosotros pagaríamos mucho dinero por ese lujo.

Nosotros pagaríamos mucho dinero por ese lujo.
We would pay a lot of money for that luxury.
From Lesson 228:Conditional tense·Spanish (Spain)

Questions & Answers about Nosotros pagaríamos mucho dinero por ese lujo.

How is pagaríamos formed in this sentence?
It is in the conditional tense, which translates to 'would pay'. For regular verbs like pagar, you take the full infinitive (pagar) and add the conditional endings. For nosotros, the ending is -íamos, giving us pagaríamos. Notice that you do not drop the -ar ending first!
Why do we use por instead of para to say 'for' here?
In Spanish, you use por when talking about an exchange, a price, or a transaction. Since we are exchanging money for the luxury here, por is the right choice. You would use para for a destination or a recipient, such as buying a gift for someone.
Why is it ese lujo instead of eso lujo?
Ese is the masculine singular adjective for 'that', and it matches the masculine noun lujo. Eso is a neuter pronoun used for abstract ideas, general statements, or unknown objects. You never put eso directly in front of a noun.
Is the word nosotros required here since the verb already tells us who is paying?
No, it is not strictly required. Because the ending -íamos already tells us that 'we' are doing the action, you could just say Pagaríamos.... Including nosotros adds emphasis, as if pointing out that 'We ourselves would pay...' or contrasting us with someone else who would not.

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