For each of the following, circle whether the person or organization described is helped, hurt, ornot affected by inflation. Then, explain your answer.1. Banks that extend fixed-rate loans.HelpedHurtUnaffected2. Farmers buy machinery using a fixed-rate loan.HelpedHurtUnaffected3. Your family buys a new home using an adjustable-rate mortgage.HelpedHurtUnaffected4. You have a savings account paying a fixed-rate of interest.HelpedHurtUnaffected5. A retired couple lives entirely on fixed pensions from former employers.HelpedHurtUnaffected6. You work a job that does not offer you a COLA.HelpedHurtUnaffected7. Banks that offer adjustable-rate loans.HelpedHurtUnaffected

Inflation is the consistent rise in prices. The main impact would be decrease in purchasing power.…

Answered: inflation.

Business

Economics

inflation.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter7: Inflation

Section: Chapter Questions

Problem 20SQ

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Choose one or more: A. Next year, the average monthly Social Security payment will be almost $1,800. B. The cost-of-living adjustment for 2020 is more than what it was in 2019. C. According to advocates for seniors, the 2020 COLA is not enough to compensate for rising healthcare costs. D. Elizabeth Warren has proposed using a new inflation measure that outpaces the current one used. E. The former program trustee argues that the current inflation measure overcompensates seniors since it ignores the substitution effect.
suggest ways on how you can contribute to reduce the effect of inflation
Explain how the current U.S. tax system levies taxes on capital gains and earned interest. What does this mean for the costs of inflation?
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Suppose you borrow $100 from a bank at 5 percent interest for 1 year and the inflation rate that year is 10 percent. Was this loan advantageous to you or the bank?
Jim holds $50,000 in money at the beginning of the year. The annual inflation rate is 2 percent, and the price level rises from 1.0 to 1.02. What is the "inflation tax" that Jim pays at the end of the year? Jim pays an inflation tax of $
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.
Suppose there are 1200 units of money on an island, but money grows by 5.32% per year. Islanders spend each unit of money 2.3 times per year on average and this spending grows by 1.98%. The price level is at 34. GDP is expected to grow at 4.83%. What is the level of inflation? Answer this as a percentage without the percentage sign and round this to two digits after the decimal. ex. If you found the rate to be 5.125%, answer 5.13.
Can the issuance of government securities reduce the expectation of inflation?
Indicate if someone would benefit or suffer from inflation.
Explain how the average inflation rates are calculated?
Suppose all wages, salaries, welfare benefits, and other sources of income were indexed to inflation. Would inflation still be considered a problem? Why or why not?