Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 4CQQ
To determine
Why theargument is not related to maintaining positive inflation rate.
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Which of the following is most likely to be true if the rate of inflation rises sharply?
a.
Businesses will be able to manage rising costs
b.
Businesses will not be able to manage rising costs
c.
Businesses are less likely to raise selling prices
d.
Businesses can reduce selling prices
Which of the following statements about inflation is true?
A.
Inflation is not a problem because it is just another way for the government to collect
revenue—an
alternative to the income tax or the sales tax.
B.
Inflation is a tax on holding money.
C.
Inflation occurs when real GDP grows more rapidly than the quantity of money.
D.
Inflation is a tax on spending money.
Suppose that Lauren is a savvy investor and expects inflation to equal 7 per cent in 2020,
but, in fact, prices rise by only 4 per cent. How would this unexpectedly low inflation rate
affect her in the following circumstances?
a The federal government cuts income tax.
b She has a fixed-rate mortgage home loan.
c She is a casual worker with no labour contract in place.
d She has invested in Treasury bonds.
Chapter 18 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
Ch. 18.1 - Prob. 1QQCh. 18.2 - Prob. 2QQCh. 18.3 - Prob. 3QQCh. 18.4 - Prob. 4QQCh. 18.5 - Prob. 5QQCh. 18.6 - Prob. 6QQCh. 18 - Prob. 1CQQCh. 18 - Prob. 2CQQCh. 18 - Prob. 3CQQCh. 18 - Prob. 4CQQ
Ch. 18 - Prob. 5CQQCh. 18 - Prob. 6CQQCh. 18 - Prob. 1QRCh. 18 - Prob. 2QRCh. 18 - Prob. 3QRCh. 18 - Prob. 4QRCh. 18 - Prob. 5QRCh. 18 - Prob. 6QRCh. 18 - Prob. 7QRCh. 18 - Prob. 8QRCh. 18 - Prob. 9QRCh. 18 - Prob. 10QRCh. 18 - Prob. 1PACh. 18 - Prob. 2PACh. 18 - Prob. 3PACh. 18 - Prob. 4PACh. 18 - Prob. 5PACh. 18 - Prob. 6PACh. 18 - Prob. 7PACh. 18 - Prob. 8PA
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Similar questions
- Which of these is not a factor that causes demand-pull inflation? a. Private consumption b. Population c. Government spending d. Supply side shocksarrow_forward1. Paul and Mary wanted to get married, and they wished to purchase a house for the new family. Therefore, they had arranged a meeting with a banker to know more about the mortgage details. They all expected that inflation will be 3 percent over the borrowing period, and the banker offered them a nominal interest rate of 6 percent. As it turns out, the inflation was 5 percent over the term of the loan. a. What was the expected real interest rate? b. What was the actual real interest rate? c. Who benefited and who lost because of the unexpected inflation?arrow_forwardWhich of the following describes a situation in which the person is hurt by inflation? Select one: a. a person paid a fixed income during an inflationary period b. a retiree whose pension is adjusted for inflation c. a person who borrows money during a period when inflation is under-predicted d. a person who lends money during a period when inflation is over-predictedarrow_forward
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