Suppose in Year 1 a country has an inflation rate of 10% and in Year 2 thecountry has an inflation rate of 3%, we would say that in Year 2 thecountry displayedO Inflation contractionO Negative inflationO DisinflationO DeflationPrior to 1921 the exchange rate between a German mark and a US dollarwas 4.2 marks per dollar. By the end of 1923, the exchange rate wasmarks per dollar.O 4.402O 12O 4.2 Trillion Which of the following is NOT one of the negative effects associated withinflation?O Menu costs, when producers need to constantly update prices to reflect thechanging value of the dollar.O The negative impact on borrowers with fixed payments (like mortgagepayments).O Shoe leather costs, the cost associated with consumers efforts to ajdustbehavior to counter-act inflation.O The lowering of the purchasing power for individuals who hold large amountsof cash.Because of inflation, what happens to the value of the REAL minimumwage during periods of time when congress keeps the minimum wageconstant (like it has been since 2009).O Since prices go up, real minimum wage decreases.O The value of the real minimum wage is determined by the level of effort put inby workers.If the congress is keeping the minimum wage constant, the real minimum wageis not changing.O The real minimum wage increases since inflation makes all prices increase.

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Suppose in Year 1 a country has an inflation rate of 10% and in Year 2 the country has an inflation rate of 3%, we would say that in Year 2 the country displayed Inflation contraction O Negative inflation Disinflation O Deflation

Suppose in Year 1 a country has an inflation rate of 10% and in Year 2 the country has an inflation rate of 3%, we would say that in Year 2 the country displayed Inflation contraction O Negative inflation Disinflation O Deflation

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 10QP

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Question

Suppose in Year 1 a country has an inflation rate of 10% and in Year 2 the
country has an inflation rate of 3%, we would say that in Year 2 the
country displayed
O Inflation contraction
O Negative inflation
O Disinflation
O Deflation
Prior to 1921 the exchange rate between a German mark and a US dollar
was 4.2 marks per dollar. By the end of 1923, the exchange rate was
marks per dollar.
O 4.4
02
O 12
O 4.2 Trillion

Which of the following is NOT one of the negative effects associated with
inflation?
O Menu costs, when producers need to constantly update prices to reflect the
changing value of the dollar.
O The negative impact on borrowers with fixed payments (like mortgage
payments).
O Shoe leather costs, the cost associated with consumers efforts to ajdust
behavior to counter-act inflation.
O The lowering of the purchasing power for individuals who hold large amounts
of cash.
Because of inflation, what happens to the value of the REAL minimum
wage during periods of time when congress keeps the minimum wage
constant (like it has been since 2009).
O Since prices go up, real minimum wage decreases.
O The value of the real minimum wage is determined by the level of effort put in
by workers.
If the congress is keeping the minimum wage constant, the real minimum wage
is not changing.
O The real minimum wage increases since inflation makes all prices increase.

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