a)
To find: The type of inflation happening in the cartoon.
a)
Explanation of Solution
The cartoon shows the demand-pull inflation because the demand-pull inflation arises when the business expands. Thus, a similar situation can be seen in the cartoon that the other round has come which means the existing game has expanded and so the amount is adjusted accordingly.
b)
To find: The rate of inflation.
b)
Explanation of Solution
The inflation rate is 3.1% because the amount increases from 1 million to 1.031 million.
c)
To find: The new title of the show when inflation is 5%.
c)
Explanation of Solution
The new title will be Welcome to another exciting round of “who wants to be 1.05 millionaires”.
Here, the five percent increase of one million will be 0.05 million so the total increased amount is 1.05 million.
Chapter 17 Solutions
Economics Today and Tomorrow, Student Edition
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