Examine the following expression and analyze it: Unforeseen high inflation redistributes society's income, diminishes the ability to make long-term plans, and forces individuals, government, and businesses to carefully assess the purchasing power of their assets.
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A: Answer to the question is as follows:
Examine the following expression and analyze it:
Unforeseen high inflation redistributes society's income, diminishes the ability to make long-term plans, and forces individuals, government, and businesses to carefully assess the
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- After staying virtually flat for about a year and a half, the average lending rate of banks has started to show signs of decline in April after the Bank of Ghana reduced the monetary policy rate the month before. The Summary of Economic and Financial Data (May 2020) published by the Bank of Ghana has shown that average lending rate has finally moved out of its comfort zone to a step downward. Prior to recording 22.38 percent in April, the average lending rate has since the past 17 months (December 2018) not come below 23%.How would banks benefit when interest rates decrease?Suppose banks require a real interest rate of 12 percent. If they expect inflation to be 3 percent, what is the nominal interest rate? Multiple Choice 36 percent 15 percent 9 percent 4 percent(Minimum of 100 Words). Determine how the following situations will affect the nominal interest rate levels: a. There is the anticipated higher government budget deficit. b. The expected inflation in the coming months is high.
- Suppose that people expect inflation to equal 3 percent, but in fact prices rise by 5 percent. Indicate whether this unexpected higher rate of inflation would help or hurt each of the following groups. a homeowner with a fixed-rate mortgage. a union worker with a fixed labor contract a company that has invested some of its endowment in government bond which pay fixed rate of return.nterest rates are usually ________ during the latter stages of a downswing in the South African business cycle. An improvement in economic activity is normally triggered by an increase in ________. Manufacturing production rises during an upswing and in the latter stages of the upswing, inflation, and interest rates ____As the treasurer of a manufacturing company, your task is to forecast the direction of interest rates. Your company plans to borrow funds and it may use the forecasting of interest rates to determine whether it should obtain a loan with a fixed or floating interest rate. The following information can be considered when assessing the future direction of interest rates:▪ Economic growth has been high over the last two years, but it is expected that it will be stagnant over the next year.▪ Inflation has been 3 percent over each of the last few years, and it is expected that it will be about the same over the next year.▪ The federal government has announced major cuts in its spending, which should have a major impact on the budget deficit.▪ The Central Bank is not expected to affect the existing supply of loanable funds over the next year.▪ The overall level of savings by households is not expected to change. (c) Assume that Singaporean interest rates have abruptly risen just as you have…
- Which of the following is NOT true about consequences of high unanticipated inflation Select one: a. It hurts people with fixed income b. It encourages consumption rather than saving c. It leads to investments into unproductive assets such as antiques, jewelry and foreign currency d. It encourages people to hold money in cash rather than in the bank e. It reduces the real value of cash you keep in your walletIn a hyperinflationary economy, monetary items: a. Are not restated because they are already expressed in terms of the measuring unit current at year-end b. Are measured at fair value c. Are restated applying the general price index d. Are restated applying the specific price indexWhich of the following would impose the greatest costs to society? high levels of expected inflation low levels of expected inflation variable rates of inflation stable rates of inflation
- Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of the recession. rise during a recession, thus increase the severity of the recession. fall during inflationary episodes, thus increase the severity of the inflation. fall during a recession, thus reducing the severity of the recession.True or False... There are an infinite number of combinations of real interest rates and inflation rates consistent with a nominal interest rate of zero.A period during which overall inflation rates are positive but falling is: Multiple Choice deflation. zero price level. disinflation. inflation.
