59. Why does money growth not always cause inflation? (A) There is a lag between monetary growth and observed inflation. (B) The extra money is 'parked' in assets, instead of being spent and circulated wide (C) The extra money is used to purchase imports, so that foreign central banks incre their cash reserves. (D) All of the above.

59. Why does money growth not always cause inflation? (A) There is a lag between monetary growth and observed inflation. (B) The extra money is 'parked' in assets, instead of being spent and circulated wide (C) The extra money is used to purchase imports, so that foreign central banks incre their cash reserves. (D) All of the above.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 37P: Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time...

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Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time payment of 20,000. However, if the inflation rate is 6 per year, how much buying power will that 20,000 have when measured in todays dollars? Hint: Start by calculating the rise in the price level over the 16 years.
(1) Inflation is a hectic problem of our economy especially in today's life. How this problem influences the economic activities in the country? Use your personal opinion to answer that what should we do to control inflation as it is also consumer's community that can contribute economy with consumption pattern of consumers. Make a meaningful report.
3. Identifying costs of inflationLarry manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
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As a manager of a firm, you are concerned about the rise of inflation rate from 3 to 5 percent(annualized) over the last four months despite the growth of the economy. a. Explain Three (3) effects of inflation to Malaysian economy.