21. To control inflation rate, the government conducts a fiscal policy which is ... (A) contractionary through increasing tax rate. (B) contractionary through increasing subsidy. (C) contractionary through increasing interest rate. (D) expansionary through increasing subsidy. (E) expansionary through increasing interest rate. 22. Which of the following is NOT included in GDP? (A) Unpaid cleaning and maintenance of houses. (B) Services such as those provided by lawyers and hair stylists. (C) The estimated rental value of owner-occupied housing. (D) Production of foreign citizens living in your country. (E) None of the above is correct. 23. At January 2, 2013, Dunia Company received a year zero-interest-bearing Rp10,000,000.00 trade note. The lrot rote for equivalent notes was 8% at that time.

21. To control inflation rate, the government conducts a fiscal policy which is ... (A) contractionary through increasing tax rate. (B) contractionary through increasing subsidy. (C) contractionary through increasing interest rate. (D) expansionary through increasing subsidy. (E) expansionary through increasing interest rate. 22. Which of the following is NOT included in GDP? (A) Unpaid cleaning and maintenance of houses. (B) Services such as those provided by lawyers and hair stylists. (C) The estimated rental value of owner-occupied housing. (D) Production of foreign citizens living in your country. (E) None of the above is correct. 23. At January 2, 2013, Dunia Company received a year zero-interest-bearing Rp10,000,000.00 trade note. The lrot rote for equivalent notes was 8% at that time.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Measuring The Cost Of Living

Section: Chapter Questions

Problem 9PA

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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.
A worker plans to retire at the age of 65, at which time he will start collecting his retirement benefits. Then there is a sudden change in the forecast of inflation when the worker is 63 years old. In particular, inflation is now predicted to be higher than it had been expected so that the average price level of market goods and wages is now expected to be higher. What effect does this announcement have on the person’s preferred retirement agea. If retirement benefits are fully adjusted for inflation?b. If retirement benefits are not fully adjusted for inflation?
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.
a)Suppose you earn a 3% wage increase from your employer. Then, the government releases economic data indicating the inflation rate is running at 5%. Are you better off? Based upon changes in your real wages, did your standards of living improve ? b) suppose you took out 20,000 in student loans at a fixed interest rate of 5%. Assume that after you graduate, inflation rises significantly as you are paying back your loans. Does this rise in inflation benefits you in paying back your student loans? Who hurt more from unexpected higher inflation, a borrower or a lender? c) in January 1980 the CPI stood at 77.8. By January 2006 the CPI was 198.3. By what percent have consumer prices increased over this period? Assume college graduates entering the job market in 1980 were being paid on average $1200 per month. Assume college graduates entering the job market in 2006 were being paid on average $3000 per month. Are the newer graduates paid more or less in real terms?
1. Rank these three economic variables below from most important to least important. Provide one relevant reason to justify the selection for each of the three positions. Economic growth and unemployment Economic growth and inflation Unemployment and inflation (I.e. a reason why each variable is placed at position 1, 2 and 3 Rank Variable Justification 1 2 3
Cost-push inflation occurs: O a. when there are increases in production costs. O b. when "too much money is chasing too few goods." O c. at or close to full employment. O d. because of excess total spending. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Which of the following describes the interest rate on an investment after calculating the impact of inflation?O NominalO RealO FinancialO Profit
11 A businessman has no fear of signing a long time contract to purchase during – Select one: a. Low inflation b. High Inflation c. Saving rate decreases d. None e. Unemployment rate increases
3. Identifying costs of inflationLarry manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
6. Interest, inflation , and purchasing power Suppose Caroline is a sports fan and buys only baseball caps. Caroline deposits 2000 in a bank account that pays an annual nominal interest rate of 15%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit {comma} a baseball cap is priced at $20. Initially, the purchasing power of Caroline's 2000 deposit is baseball caps. For each of the annual inflationrates given in the following table, first determine the new price of a baseball cap, assuming it rises at the rate of inflation.then enter the corresponding purchasing of Caroline's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint:Brown your answers in the first row down to the nearest baseball cap. For example, if you find that the deposit will cover 20.7 baseball caps, you would round to the purchasing power down…
Insert the missing word or phrase: 1. _____ _________ _________ - the increased costs associated with making transactions that arise from the public’s efforts to avoid the inflation tax.
Question 8 (a) Identify two macro-economic aims of the government. (b) Explain two reasons why someone may be of working age but not in the labor force? (c) What can cause an increase in a country’s labor force? (d) Explain how different types of unemployment may be caused and consider which might be the most serious. (e) Can a rise in unemployment cause a fall in inflation? (f) What are some policies government may take to reduce unemployment