PRIN.OF ECON.ACCESS CODE
2nd Edition
ISBN: 9780393691757
Author: Mateer
Publisher: NORTON
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Question
Chapter 21, Problem 9QFR
To determine
(a)
To explain:
The main misconception about inflation.
To determine
(b)
To explain:
The difference between
To determine
(c)
To explain:
The concept of wealth redistribution and the way wealth redistribution is related to uncertainty in future price.
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Which of these is not a factor that causes demand-pull inflation?
a.
Private consumption
b.
Population
c.
Government spending
d.
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Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China.With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. HyperinflationWhat is one of the potential effects of the aforementioned inflation on the South African economy?A. Decreased purchasing power of money.B. Increased consumer savings.C. Reduced interest rates on loans.D. Higher demand for imports.
People are said to have rational expectations if they
Select one:
a. merely guess at the inflation rate
b. assume that this year's inflation rate will be equal to the average inflation rate
over the past 10 years
O c. use all available information in forming their expectations about inflation
O d. assume that this year's inflation rate will be the same as last year's inflation rate
Chapter 21 Solutions
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- If, over time, wages and salaries on average rise at least as fast as inflation, why do people worry about how inflation affects incomes?arrow_forwardInflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?arrow_forwardWhat has been a typical range of inflation in the U.S. economy in the last decade or so?arrow_forward
- Do neoclassical economists see a value in tolerating a little more inflation if it brings additional economic output? Explain your answer.arrow_forwardThe economy starts out on the curves AD, and SAS.. Some events then occur that generate a cost-push inflation. What might those events have been? Describe their initial effects and explain how a cost-push inflation spiral develops. Which of the following events might cause a cost-push inflation? OA. a decrease in exports B. a decrease in government expenditure C. an increase in the money wage rate or an increase in the money prices of raw materials D. an increase in the quantity of money Starting at point A, the initial effect of a cost-push inflation is a move to point As a cost-push inflation spiral proceeds, it follows the path OA. B; E, G, I OB. C; B, H, G, I OC. C; E, H, I OD. E: I 230- 190 150 110- 70- 30+ Price level (GDP deflator, 2007 = 100) LAS 13 Đ G 8 w H C SAS2₂ SAS, ADO 15 19 Real GDP (billions of 2007 dollars) SASO AD₂ AD₁ 21arrow_forwardWhich of the following is a positive statement? a. When the unemployment rate in an economy is 7 percent, the unemployment rate of the urban population is often close to 40 percent. Ob. Unemployment and inflation are equally important problems. C. An inflation rate of 7 percent is too high. d. Unemployment is a less important problem than inflation. e. An unemployment rate of 7 percent or higher is a national disgrace. 000arrow_forward
- Two main macroeconomic concerns are the problems of inflation andunemployment.a. What are the social costs of inflation? Explain TWO of them? b. What is natural rate of unemployment? Explain the TWO main causesof natural rate of unemployment. With reference specifically to ONEof these causes, suggest ONE practical government policy that reducesthe natural rate of unemployment.arrow_forward1) Explain the trade off between inflation and output in macroeconomics. 2)Exlain why the government may/may not be able to just randomly implement policies to increase ouput.arrow_forwardIn 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_forward
- The Detroit Free Press reported economic data for last month. Last month, the national unemployment rate decreased by 0.1% while the price level rose by 2%. What could have happened during that time? The economy experienced last month. O a rightward shift of AS cost-push inflation a leftward shift of AS demand-pull iflationarrow_forwardQuestion 2 Full explain this questionarrow_forward7 Find and describe an inflation contemporary issue of supply and demand into three paragraphs with empirical facts including proper sources and citations related to macroeconomics as well as interesting.arrow_forward
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