The accompanying table provides the inflation rate in the year 2005 and the average inflation rate over the period 2006–2019 for eight different countries.Country Inflation rate in 2005 Average inflation rate in 2006–2019Brazil 6.87% 5.47%Canada 2.2% 1.72%China 1.77 2.68France 1.74 1.23Indonesia 10.45 5.83Japan −0.28 0.35Turkey 8.18 9.53United States 3.39 1.95Data from: IMF.Given the expected relationship between average inflation and menu costs, rank the countries in descending order of menu costs using average inflation over the period 2006–2019.Rank the countries in order of inflation rates that most favoured borrowers with 10-year loans that were taken out in 2005. Assume that the loans were agreed upon with the expectation that the inflation rate for 2006 to 2019 would be the same as the inflation rate in 2005.Did borrowers who took out 10-year loans in Japan gain or lose overall versus lenders? Explain. 1. The accompanying table provides the inflation rate in the year 2005 and the average inflation rate over the period 2006-2019 for eightdifferent countries.CountryBrazilCanadaChinaFranceIndonesiaJapanTurkeyUnited StatesData from: IMF.Inflation rate in 20056.87%2.2%1.771.7410.45-0.288.183.39Average inflation rate in 2006-20195.47%1.72%2.681.235.830.359.531.95a. Given the expected relationship between average inflation and menu costs, rank the countries in descending order of menu costs usingaverage inflation over the period 2006-2019.b. Rank the countries in order of inflation rates that most favoured borrowers with 10-year loans that were taken out in 2005. Assume thatthe loans were agreed upon with the expectation that the inflation rate for 2006 to 2019 would be the same as the inflation rate in 2005.c. Did borrowers who took out 10-year loans in Japan gain or lose overall versus lenders? Explain.

Inflation means the sustained increase in the general price level of products and services in an…

Answered: 1. The accompanying table provides the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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The accompanying table provides the inflation rate in the year 2005 and the average inflation rate over the period 2006–2019 for eight different countries. Country Inflation rate in 2005 Average inflation rate in 2006–2019 Brazil 6.87% 5.47% Canada 2.2% 1.72% China 1.77 2.68 France 1.74 1.23 Indonesia 10.45 5.83 Japan −0.28 0.35 Turkey 8.18 9.53 United States 3.39 1.95 Data from: IMF. Given the expected relationship between average inflation and menu costs, rank the countries in descending order of menu costs using average inflation over the period 2006–2019. Rank the countries in order of inflation rates that most favoured borrowers with 10-year loans that were taken out in 2005. Assume that the loans were agreed upon with the expectation that the inflation rate for 2006 to 2019 would be the same as the inflation rate in 2005. Did borrowers who took out 10-year loans in Japan gain or lose overall versus lenders? Explain.

1. The accompanying table provides the inflation rate in the year 2005 and the average inflation rate over the period 2006-2019 for eight
different countries.
Country
Brazil
Canada
China
France
Indonesia
Japan
Turkey
United States
Data from: IMF.
Inflation rate in 2005
6.87%
2.2%
1.77
1.74
10.45
-0.28
8.18
3.39
Average inflation rate in 2006-2019
5.47%
1.72%
2.68
1.23
5.83
0.35
9.53
1.95
a. Given the expected relationship between average inflation and menu costs, rank the countries in descending order of menu costs using
average inflation over the period 2006-2019.
b. Rank the countries in order of inflation rates that most favoured borrowers with 10-year loans that were taken out in 2005. Assume that
the loans were agreed upon with the expectation that the inflation rate for 2006 to 2019 would be the same as the inflation rate in 2005.
c. Did borrowers who took out 10-year loans in Japan gain or lose overall versus lenders? Explain.

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