14) When the government prints money and gives it to the old as a subsidy-gift then,A) The gift has no cost.B) The cost of the gift is the inflation taxC) The cost of the gift is the needless savings on the use of moneyD) A and BE) B and Caliren hloy etJar noiques orb

The total amount of money being circulated in an economy is referred to as money supply. It includes…

Answered: 14) When the government prints money…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 15RQ: Why does the quality/new goods bias arise if we calculate the inflation rate based on a fixed basket...

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Why does the quality/new goods bias arise if we calculate the inflation rate based on a fixed basket of goods?
According to Table 19.7, how often have recessions occurred since the end of World War II (1945)?
Inflation 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?
Compute the inflation rate for fruit prices from 2001 to 2004.
The index number representing the price level changes from 110 to 115 in one year and then from 115 to 120 the next year. Since the index number increases by five each year, is five inflation rate each year? Is the inflation rate the same each year? Explain your answer.
What has been a typical range of inflation in the U.S. economy in the last decade or so?
The prime interest rate is the rate that banks charge their best customers. Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years would it have been best to be a lender? Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years given would it have been best to be a borrower?
1. You deposit $5000 in the bank for one year. CASE 1: inflation = 0%, nom. interest rate = 20% CASE 2: inflation = 10%, nom. interest rate = 30% a. In which case does the real value of your deposit grow the most? Assume the tax rate is 15%. b. In which case do you pay the most taxes? c. Compute the after-tax nominal interest rate, then subtract off inflation to get the after-tax real interest rate for both cases.
Table 2.5.4 from BEA What categories of consumption expenditures have the highest inflation rate between 2012 and 2021? Are there any categories for which prices are relatively stanle or cheaper?
Need help with economics question asap 3. Assume that the economy has an annual inflation rate of 5 percent. Are the following investments profitable in real terms?(a) A $1,000 face-value bond, which you purchase at a 30% discount, that pays a monthly coupon of $4. (b) A $1 million house increases in price by $45,000 per year. You do not rent out the house, nor do you undertake renovations. (c) A $1 million house that you renovate for $45,000 over the course of a year, causing the price to increase to $1.1 million.
a1. You learn on the business channel that inflation was about 0.8% last month. Assume this rate is maintained each month for a year. What will the annualized rate be? EXAMPLE: A rate of 0.1% per month represents (1 + 0.001)^12 -1 = 0.0121 or 1.21% annually. a2. Your sales grew 4% last year. EXAMPLE: A 2% growth rate for the year would require 1.02 = (1 + r)^12. Solve this for r: See image ; r = .00165 or .165% per month on average. What average monthly growth rate is needed to give the 4% growth?
6. Assume that the inflation rate will be 4% for all future years, and the interest rate is 7%. How many years will it take for the dollar to have the purchasing power that is equal to 65% of itscurrent purchasing power? (select the closest answer)a) about 7 yearsb) about 11 yearsc)about 18 yearsd) about 20 years

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14) When the government prints money and gives it to the old as a subsidy-gift then, A) The gift has no cost. B) The cost of the gift is the inflation tax C) The cost of the gift is the needless savings on the use of money D) A and B E) B and C rlen aven blory e Jarl noiques ocb olv