What determines a country's long run average Inflation rate? Select one: O a. The rate of inflation in a country's trading partners. O' b. The rate at which the national debt is rising. O c. The rate at which costs are rising. O d. The real rate of currency depreciation. O e. The growth rate of the money supply.

What determines a country's long run average Inflation rate? Select one: O a. The rate of inflation in a country's trading partners. O' b. The rate at which the national debt is rising. O c. The rate at which costs are rising. O d. The real rate of currency depreciation. O e. The growth rate of the money supply.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How does excess money actually create inflation? Select one: O a. By raising the exchange rate. O b. By raising the cost of factors of production when producers attempt to increase output to meet the additional demand. O c. By raising the time it takes to produce output. O d. By raising the rate of interest required to hold a greater money stock. O e. By raising the amount of imports when the excess money is used to buy additional goods. Next page ere to search
Which of the following does not influence the rate of inflation? O a. The number of people affected by inflation O b. the rate of trade with other countries O c. The rate of growth in other countries O d. The rate at which prices are rising
Imported inflation results from: O a. Increase level of unemployment а. O b. Increase in prices of input goods in domestic economy. c. Increased prices of imported goods O d. None е. Industrial stagnation
QUESTION 8 All of the following factors have contributed to the rapid expansion of international trade since the 1980s, except for O A. progress in communications. O B. trade agreements. O C. lower transportation costs. O D. protectionism. O E. lower tariffs. QUESTION 9 Year CPI 2001 177.1 2002 179.9 2003 184.0 Consider the following values of the consumer price index for 2001, 2002, and 2003. The inflation rate in 2003 was equal to O A. 1.02 percent. O B. 2.28 percent. OC. 2.23 percent. O D. 1.56 percent. O E. 1.58 percent.
Assume that initially PPP holds, the theory of PPP suggests that if the inflation rate in your country is lower than the inflation rate in the US, its currency is, _and should. Select one: O a. overvalued; appreciate O b. undervalued; appreciate O c. undervalued; depreciate O d. remain unchanged O e. overvalued; depreciate
Suppose there's an unanticipated increase in the rate of inflation. Which of the following is likely to be true? Select one: a. Workers whose nominal wages are set at the beginning of the year are likely to suffer a decrease in real wages. O b. Workers whose nominal wages are set at the beginning of the year are likely to enjoy an increase in real wages. The real value of outstanding loan balances of debtors will increase. O d. Creditors who made loans based on the anticipated rate of inflation will earn a higher real interest rate than they expected.
High and unexpected inflation has a greater cost Select one: O a. for those who hold a little money than for those that hold a lot of money O b. for savers in high income tax brackets than for savers in low income tax brackets O c. for those whose wages increase by as much as inflation than for those who are paid a fixed nominal wage O d. for those who borrow than for those who save
stant, does this zero-inflation goal require that the rate of money growth equal zero? If yes, explain why. If no, explain what the rate of money growth should equal. 4. The economist John Maynard Keynes wrote in The Economic Consequences of the Peace (1919): "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can con- fiscate, secretly and unobserved, an important part of the wealth of their citizens." Justify Lenin's assertion. 5. Suppose that a country's inflation rate increases sharply.. What happens to the inflation tax on the holders of money? Why is wealth that is held in savings accounts not subject to a change in the inflation tax? Can think of any way in which holders of savings accounts are hurt by the increase in the inflation rate? you 12 6. Hyperinflations are extremely rare in countries whose central banks are independent of the rest of the ernment. Why might…
Inflation results in: O An increase in the purchasing power of money. A decrease in the purchasing power of money. O An increase in trade surplus. O An increase in savings and investment. A Moving to another question will save this response. DE
When inflation falls, people Select one: O a. make less frequent trips to the bank and firms make more frequent price changes O b. make more frequent trips to the bank and firms make less frequent price changes Oc. make less frequent trips to the bank and firms make less frequent price changes O d. make more frequent trips to the bank and firms make more frequent price changes ge en this page
2. Compute inflation rates for the following cases. a. Calculate the one-period inflation rate for the US in 2022 given that the CPI in 2021 was 271.0 and the CPI in 2022 was 292.7. b. Using the CPI data table from question 1, calculate the average annual inflation rate from 1970 to 1990. (Hint- this will use the constant growth formula from Lecture 3). c. Using the CPI data table from question 1, calculate the average annual inflation rate from 2000 to 2020. (Hint- this will use the constant growth formula from Lecture 3).
Higher inflation Select one: O a. causes firms to change prices less frequently and makes relative prices more variable O b. causes firms to change prices more frequently and makes relative prices more variable O. causes firms to change prices more frequently and makes relative prices less variable O d. causes firms to change prices less frequently and makes relative prices less variable