If inflation rises unexpectedly by 5% which of the following economic actors are helped by the higher than expected inflation? a) People and government with long-term debt at fixed interest rates b) Someone with a large stash of cash in a safe deposit box  c) None of the choices is correct  d) A person who is not due to receive a pay raise for another 11 months  e) A bank lending money at a fixed rate of interest

Q: Are the revenues, salvage value, and working capital are responsive to the general inflation rate?…

A: Yes, revenues, salvage value, and working capital are responsive to general inflation rate in the…

Q: What can be done to minimize effects of difficult times due to high inflation, recession and/or…

A: Monetary Policy refers to the process where the central bank implements various actions such as…

Q: The nominal interest rate currently paid by local commercial banks is 8.5%. If the inflation rate is…

A: Real Interest rate refers to the interest rate that has been adjusted for inflation, reflecting the…

Q: If inflation is anticipated   A. it is costless to society   B. debtors gain   C. it costs…

A: 1)Anticipated inflation is when the people or the economy are able to predict or forecast the…

Q: A significant rise in the price of oil causes:   Question 3 options:   a)  demand-pull inflation…

A: Demand pull Inflation: When the  Inflation in the economy is caused because of the excessive…

Q: show why the self correction process involves only temporay periods of inflation or deflation

A: A rise in ADInitially, the economy is in long-run equilibrium where AD=AS at E. The current output…

Q: Can I get a real life example or application of inflation that uses the formula F=P(1+i)^n.

A: Inflation is the consistent rise in general price level of goods and services that affects our daily…

Q: Assuming prices and output are somewhat flexible, an increase in consumer spending will cause…

A: The assumption that prices and output(y) are flexible allows for changes in the equilibrium level as…

Q: Q23 MCQ Two factors that complicate the calculation of the inflation rate are:   a) substitution…

A: The main reason for increasing in the inflation rate is mainly one due to increasing in the…

Q: There are many kinds of costs of inflation to a society. Explain THREE such costs of inflation which…

A: Inflation is a systematic measure of the rate at which the price level of a basket of selected goods…

Q: Define the term Inflation-free interest rate?

A: The inflation-free interest rate is also known as real interest rate measures the earning power of…

Q: Which of the following economic changes are consistent with demand -pull inflation ? Check all that…

A: Demand pull inflation or excess demand inflation takes place when aggregate demand is rising while…

Q: Which of the following is a potential benefit of inflation? Higher unemployment Higher prices Less…

A: Inflation refers to the continuous increase in general price level.

Q: Discuss critically about demand-pull and cost-push inflation with the help of graphically and…

A: Inflation is defined as a prolonged rise in the overall price level, resulting in a loss of money's…

Q: The price level was at an index value of 280 at the start of the year. It is expected to reach 300…

A: According to the Fisher effect, r = 1 + i 1 + π - 1where,r = Real interest ratei = Nominal interest…

Q: Wage agreements and loan contracts are two types of multiperiod agreements that are important for…

A: Wages(w) are paid by the employer to the employees for the services(s) received. The wage-setter,…

Q: How long would it take for the price level to double if inflation persisted at: (a) 2 percent per…

A: Inflation is the rate of increase in prices over a given period of time. Inflation is typically a…

Q: Inflation is a negative macroeconomic phenomenon that distorts the economic behaviour of both…

A: CPI (consumer price index) gives the changes in the price level for a specified basket of consumer…

Q: Which of the following statements are FALSE?Select all appropriate choices. When the inflation rate…

A: In an economy, inflation rate is considered as a macroeconomic variable as it influence the economy…

Q: How long would it take for the price level to double if inflation persisted at the following…

A: a.)Years to double:If the inflation rate is 17.5 percent per year, the years to double the price…

Q: Define the term inflation rate?

A: Nominal interest rate is the rate which does not take inflation into account. All the prices of…

Q: Actual inflation is the sum of three separate components: ... a.Validated, expected and output gap…

A: Inflation is defined as the rate at which prices increases. There are two types of inflation that…

Q: Cost-push inflation may be caused by:

A: Cost push inflation is one of the major type of inflation.

Q: The effects of inflation are seen in: Question options: a) goods, services, wages and income levels…

A: Asper guidelines we will answer the first question.

Q: Discuss methods to overcome inflation in India

A: Inflation refers to an increase in the prices of goods and services.

Q: Historically, there is a correlation between the inflation rate and real economic activity (such as…

A: Inflation refers to the increase in price of goods on a general level, throughout the economy.

Q: Which of the following factors could start a demand-pull inflation? # randomize A. an increase in…

A: Demand pull inflation is defined as the rise in price due to increase in demand. In other words,…

Q: Define the term Inflation-Free Interest Rates?

A: The inflation-free interest rate is also known as real interest rate measures the earning power of…

Q: Inflation rates, like most statistics, are imperfect measures. Can you identify two ways that the…

A: A currency's purchasing power depreciates with time, known as inflation. A currency's purchasing…

Q: Assuming prices and output are somewhat flexible, a decrease in investment will cause inflation to…

A: Inflation is the general rise in the price level in an economy over a period of time. It reduces the…

Q: Which of the following is not a component of the required rate of return?   a. expected rate of…

A: Meaning of Financial Assets: The term financial assets refers to the situation, under which these…

Q: Inflation can be caused either by rapid growth rate of aggregate demand or by sluggish growth of…

A: An economy attains equilibrium when aggregate demand is equal to the aggregate supply.

Q: Why is it difficult for companies to be profitable under deflation? Explain by comparing the…

A: Inflation refers to the rate at which the average price level of all goods and service rises in the…

Q: . “Persistent budget deficits always lead to higher inflation.”Is this statement true, false, or…

A: Inflation: It refers to the process in which the prices of the goods and services have been…

Q: In which situation is a program to reduce inflation likely to have the lowest costs?     if the…

A: sacrifice ratio is defined as the cumulative rise in unemployment following the disinflation,

Q: Core inflation figures omit health care prices, but not energy prices. True or False True False

A: The given statement is false. Core inflation is the change in the costs of goods and services but it…

Q: There are no costs associated with inflation if the inflation rate is perfectly anticipated. Select…

A: Inflation is responsible for the rise in price levels over time. The quantity of a good would…

Q: The cost of inflation reduction is a large, permanent increase in unemployment. true or false

A: The Phillips curve basically depicts the relationship between inflation and unemployment, and the…

Q: Determine how the following situations will affect the nominal interest rate levels: a. There is the…

A: a) If there is a higher budget deficit, it will increase the nominal interest rate. The reason is…

Q: True or False: Cost-push inflation is caused by a rightward shift in the short-run aggregate supply…

A:

Q: The.... real interest rate will be greater than the .... real interest rate when the .... rate of…

A: Ex ante means we look at future events based on possible predictions. Ex post means actual after the…

Q: Expectations of inflation are ____________ effective than/as actual inflation in ____________…

A: Inflation is the general increase in the overall prices in the economy.

Q: Which of the following is NOT true about consequences of high unanticipated inflation    Select…

A: Unanticipated inflation: It means that there is an increase at a faster pace rather than expected.…

Q: A consequence of unanticipated inflation in an economy is that: Group of answer choices the rate of…

A: In economics, inflation is generally defined as the overall increase in the price level in the…

Q: Price stability is: The goal of maintaining fair prices for consumers by keeping markets…

A: Inflation is defined as the rise in the average price level of commodities and services in the…