PRINCIPLES OF MACROECONOMICS-CONNECT ACC
PRINCIPLES OF MACROECONOMICS-CONNECT ACC
7th Edition
ISBN: 9781264088485
Author: Frank
Publisher: MCG
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Chapter 15, Problem 15.10CC
To determine

Typical path for output, inflation, and interest rate.

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In the short-run you know that firms and households expect inflation of 3.6% next year. There are no supply shocks and cyclical unemployment is 1.09%. Lambda is 0.5. With this information, what is the inflation rate today? Write your answer as a percentage, round at one (1) decimal, and do not write the percentage sign. Use a minus sign if needed.
Suppose that the price level in Canada was 100 in 2007, 105 in 2008, 110 in 2009, and 115 in 2010. Over this time period, a) the inflation rate was positive b) the inflation rate increased c) the inflation rate decreased d) hyper inflation occurred e) both a and c are correct
Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit.
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