Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 5, Problem 4QQ
To determine
The costs of unexpected inflation.
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Students have asked these similar questions
1)
Whether you gain or lose during a period of inflation depends on:
a) how the price increases affect government purchases of goods.
b) whether the economy is expanding or contracting.
c) whether you save or not.
d) whether your income rises faster or slower than prices of the things you buy.
2)
A real wage that does not keep pace with inflation implies:
a) a decrease in purchasing power.
b) a decrease in nominal wages.
c) a decrease in nominal wages after inflation.
d) an increase in the inflation adjusted real wage.
The price-wage spiral is associated with which type of inflation?
a.
Cost push
b.
Demand pull
c.
Built in
d.
Chronic
If inflation is anticipated
A.
it is costless to society
B.
debtors gain
C.
it costs less to society than if unanticipated
D.
creditors gain
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Similar questions
- What type of inflation is caused by an increase in the purchasing power of people? a. Cost push b. Demand pull c. Built in d. Chronicarrow_forwardWhich of these words or phrases do not describe what inflation is? a.Decrease in price level b.General prices c.Over a period of time d.Sustained increase in pricesarrow_forwardA homeowner whose wages will keep pace with inflation over the years but whose monthly mortgage payments to the bank will remain fixed. Who wins or losses from the above statement? A. The outcome is uncertain B. C. D. E. The homeowner wins; the bank loses The homeowner loses; the bank loses The homeowner wins; the bank wins The homeowner loses; the bank winsarrow_forward
- In theory, inflation not only ______ the value of consumers' money over time, but it also increases the ____ of producers over time. a.Decreases, wages b.Increases, interest rates c.Decreases, unemployment d.Increases, real GDParrow_forward2. When too much money chases too few goods, the resulting Inflation is called: (a) Deflation (b) Demand-pull Inflation (c) Cost push inflation (a) Stagflationarrow_forwardWhich of these is not a negative effect of inflation? a. It lowers down the value of money b. It rises the level of employment c. It increases the price of goods and services d. It lowers down the purchasing power of peoplearrow_forward
- Inflation targets are usually specified as a. a range for the inflation rate. b. a specific inflation rate target, for example, 1 percent. c. deviations from the inflation rate. d. the short-term interest rate rate minus 2 percent.arrow_forwardWhich 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.arrow_forwardWhen unexpected inflation occurs,A. borrowers are harmed.B. average prices have increased.C. lenders benefit.D. real wages rise.arrow_forward
- Unanticipated inflation Unanticipated inflation penalises: A. those earning incomes that are taxed in nominal terms B. those who hold cash C. those who lend money at a fixed interest rate D. those earning incomes that are taxed in nominal terms, those who hold cash and those who lend money at a fixed interest ratearrow_forwardExplain the term Inflation and how it is measured.arrow_forwardReal GDP in 2015 is $100b and real GDP in 2016 is $110b. In 2016, nominal GDP grows by 3%. What can you say about inflation rate? a. Not enough information to say anything b. Inflation is -7% c. Inflation is constant d. Inflation is 13% e. Inflation is 10%arrow_forward
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