[Select] inflation occurs when the economy experiences a period when consumers fearing higher prices purchases goods and services at a rate greater than producers are able to supply. As supplies decrease, prices should increase.
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![[Select]
inflation occurs when the economy experiences a period
when consumers fearing higher prices purchases goods and services at a rate greater than
producers are able to supply. As supplies decrease, prices should increase.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7353de8a-3834-465a-af3b-558129de7e04%2Fe9a717f8-6d54-49eb-8333-64522fed02b8%2F4mjgcqc_processed.png&w=3840&q=75)
![[Select]
[Select]
Demand-pull
Unanticipated
Anticipated
Core
Cost-push
10
5
i
F](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7353de8a-3834-465a-af3b-558129de7e04%2Fe9a717f8-6d54-49eb-8333-64522fed02b8%2Fzmys2q_processed.png&w=3840&q=75)
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- If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 monthsOfficially consumer price inflation occurs when there is Inflation is measured by calculating A) one-time increase in the general price level measured using GDP Deflator; a price level. B) a one-time increase in wages; a price index. C) an increase in the price level measured using CPI; the percentage change in a price index from one year to the next. D) a sustained increase in wages and GDP Deflator; the percentage difference between the price level and a price index.Bob loans his sister-in-law $1000 so she can make her rent. She must pay it back after one year. If Bob charges her 6 percent interest and wants to get a real return (real interest) of 3.5 percent, Bob must anticipate that inflation will be___________ percent over the next year. (Carefully follow all numeric instructions. Enter your answer "as a percent, but without the percentage sign." In other words, if you think Bob predicts 99.99 percent inflation, just enter 99.99 in the blank.)
- 20) Some inflation is actually considered good. Explain why that is.Refer to Table 3. Assume that this economy produces only two goods Good X and GoodY. If year 1 is the base year, the value for this economy’s inflation rate between year 1 andyear 2 isA) -6.1%.B) -5.5%.C) 6.5%.D) 79%.In Zimbabwe the rate of inflation hit 90 sextillion percent in 2009, with prices increasing tenfold every day. At that rate, how much would a $2 jug of milk cost six days later? Hint: Use the following equation to calculate future price: Future price = (current price) x (inflation rate)t, where t is the number of days in the future. Instructions: Round your response to one decimal place. $ million
- In Zimbabwe the rate of inflation hit 90 sextillion percent in 2009, with prices increasing tenfold every day. At that rate, how much would a $3 loaf of bread cost five days later? Hint: Use the following equation to calculate future price: Future price = current price × inflation ratet, where t is the number of days in the future Instructions: Round your response to one decimal place. $ _____ millionSuppose two parties agree that the expected inflation rate for the next year is 6 percent. Based on this, they enter into a loan agreement where the nominal interest rate to be charged is 6 percent. If inflation for the year turns out to be 4 percent, who gains and who loses? Instructions: Enter your responses as whole numbers. The ex ante real interest rate is 10 percent. This is what borrowers think they are paying and lenders think they are earning. With the actual inflation of 4 percent, the ex post real interest rate will be percent.Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut, and one newspaper. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to year two, there is (a. inflation, b. deflation) at an annual rate of ___ %. In year one, $72.00 will buy ____ baskets, and in year two, $72.00 will buy ____ baskets. This example illustrates that, as the price level falls, the value of money (a. rises, b. falls, c. remains the same).
- Which of the following is NOT a step in calculating the inflation rate from one period to the next? Collect the prices from the stores where people shop. O Find out what people typically buy. Measure the change in quality of the products from one period to the other. Find the total value of the basket of goods and services.Sally has a credit card balance of $2,000. The credit card company charges a nominal interest rate of 14 percent a year on unpaid balances. The inflation rate is 5 percent a year. Calculate the real interest rate that Sally pays the credit card company. The real interest rate that Sally pays the credit card company is ____ percent a year.Examine the effects of inflation in attention to food and accommodation expenses.
