ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Discussion Question Ch 12
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Discussion Question (DQ) Chapter 12:
According to the textbook, How do economists use the equation m * v = p * yR to explain the cause of inflation?
Required: In not less than 300 words and not more than 600 words, use a term(s) or idea(s) or concept(s) from the chapter of your textbook you are currently assigned to respond to the DQ. Every response should have three elements: a textbook term(s); section citation and correct grammar and punctuation
- Use of a TEXTBOOK term(s) or idea(s) or concept(s) from the assigned chapter textbook .
- Textbook citation—however, since your e-textbook does not have page numbers you can cite to a relevant chapter “section” (see below for an example of what a chapter sections look like). For example, you could say “I used the
comparative advantage section’s discussion of _________ to answer this question.)
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- ANALYZE: Understanding Inflation Saving money in a bank account that earns less in interest (ex: 0.75%) than the economy experiences inflation (avg: 3%) leaving you with less spending power in the future. If you save $500 in a savings account now, you'll be able to buy LESS with it in 2025 than you could today. That's what makes INVESTING an important part of your long-term financial health. Let's explore inflation a little further using this Inflation Calculator. Suppose you're heading off to college next year somewhere cold, and you want to purchase a North Face parka for $350. 1. From each paycheck of your afterschool job, you're able to save $45 toward the coat. You get paid twice a month. How many months will it take you to save enough money to buy your North Face jacket?arrow_forwardWhat is the typical relationship among interest rates on three-month Treasury bills, long-term Canada bonds, and corporate bonds? Select the best answer: OA. All three rates are virtually exact representations of the rate of inflation. OB. They tend to move randomly and independently of each other. OC. They tend to move together over time with the corporate bond having the highest rate of interest. OD. They tend to move together over time with the three-month Treasury bill having the highest rate of interest.arrow_forwardam. 110.arrow_forward
- 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 interestarrow_forwardWhich of the following groups would most likely be harmed by inflation? Group of answer choices spenders workers retirees none of the above Older people often reminisce about the “good old days” when prices were much lower. This is misplaced nostalgia primarily because in the “good old days” Group of answer choices prices were not really that low wages were much lower also When interest rates fall, investment expenditures by businesses Group of answer choices decrease increasearrow_forwardMeasuring Inflation and Unemployment: Around the World The growth of American tourism to Cuba has dramatically affected private sector employment, as Cuban entrepreneurs start ventures focused on this new group of tourists. The influx of American tourists to Cuba is likely to lead to Ohyperinflation, as the Cuban economy begins to expand, and new businesses begin to flourish. disinflation, as employment flourishes in the informal market. inflation, as more money chases the limited volume of goods and services available in the Cuban economy. O deflation, as Cuban businesses compete for tourist dollars.arrow_forward
- The following equationarrow_forwardnot use ai pleasearrow_forwardMake an inflation rate forecasts graph based on the description. I need help please. Based on our analysis of the last ten years of inflation data, we project that inflation rates in the Philippines under the Marcos administration will remain relatively stable over the next five years. From 2011 to 2020, inflation rates in the country ranged from 1.2% to 6.7%, with an average of 3.4%. For the next five years, we expect inflation rates to remain within the range of 2.5% to 4.5%, with an average of 3.5%.arrow_forward
- Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward8. Assume that S, = 1.60 USD/GBP. How will this spot rate adjust according to PPP if the United Kingdom experiences an inflation rate of 5% while the U.S. experiences an inflation rate of 3%?arrow_forwardWhich of the below statements IS NOT CORRECT about the term "inflation" or its effect, as Charles Wheelan explains the term in this chapter? Group of answer choices Massive inflation (or, hyperinflation) distorts the economy, as workers rush to spend their cash before it becomes worthless. The most instructive way to think about inflation is not that prices are going up, but rather that the purchasing power of the dollar is going down. Inflation redistributes wealth arbitrarily, as unexpected bouts of inflation are good for debtors and bad for lenders. Inflation favors retired people with fixed incomes and increases the purchasing power of their income.arrow_forward
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