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- Inflation does not affect all prices equally. This ragged inflation causes relative-price variability, and consumer decisions Question 33 options: are distorted and the ability of markets to efficiently allocate factors of production is impaired. are distorted, but markets are still able to efficiently allocate factors of production. are not distorted, but the ability of markets to efficiently allocate factors of production is impaired. are not distorted and markets are still able to efficiently allocate factors of production.Inflation expectations refer to the rate at which: Group of answer choices actual inflation exceeds expected inflation. last year's prices rose. current prices are rising. average prices are expected to rise next year.An added benefit of inflation is that it allows for the possibility of a. menu costs. b. aggregate supply shocks. c. negative real interest rates. d.recessions.
- Expectations of inflation are ____________ effective than/as actual inflation in ____________ production costs. a) less; increasing b) less; decreasing c) as; increasing d) as; decreasing e) more; increasingAssuming prices are sticky in the short run, a decrease in useful government spending will cause inflation to __________ in the short run and growth to ___________ in the short run. remain unchanged/decrease increase/increase decrease/increase decrease/decrease remain unchanged/remain unchangedHigh inflation rates are considered detrimental to a country's economy. Please describe and discuss the 2 major reasons that may induce a particular product seller to raise its product price. Please discuss and describe how high inflation levels may affect negatively participants in the 2 major groups of economic decision-makers.
- Assuming prices and output are somewhat flexible, an increase in consumer spending will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease uncertain/decreaseThis kind of inflation is called (cost-push, demand-pull) inflation. Inflation of this type is accompanied by (a decrease, an increase) in aggregate output.the consumer price index can be used to measure inflation. there are potential problems with this process though that can result in inflation being overstated or understated. place each statement to according if it would cause inflation to be overstated, understated, or be an accurate representation of inflation. causes inflation to be overstated causes inflation to be understated does not cause inflation to be overstated or understated Answer BANK: Mary and Bob replace their old minivan with a new one. The new van costs 15% more than the old van, but the new model has many updated features like a camera to assist with backing up, GPS and better fuel economy. Donna, a confirmed chocoholic, notices that her favorite candy bar shrank in size, but its price stayed the same. Zach loves bagels, but bagels are becoming more expensive so he changes his breakfast routine to include a muffin instead because muffins remain relatively cheap. Chris is an avid…
- The high cost of oil has caused an increase in the price of plastic. (Plastic is made from petroleum). Bottled water companies now have to pay more for each bottle they use, in return they are now charging more per bottle of water. This would be The paradox of thrift Energy consumption disequilibrium Demand pull inflation Cost push inflation None of the aboveA period during which overall inflation rates are positive but falling is: Multiple Choice deflation. zero price level. disinflation. inflation.Demand-pull inflation Demand-pull inflation occurs when: A. input costs rise. B. unemployment is above the natural rate. C. people incorrectly forecast inflation. D. aggregate demand increases.
