Suppose the economy currently has an inflation rate of 7%. Moreover, the slope of the economy's Phillips Curve is 1/2. Over the next 3 years, short-run output is +4 percent, O percent, and -2 percent. Based on this information you know that the inflation rate at the end of the third vear is
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- The total price of purchasing a basket of goods in the United Kingdom over four years is: year 1=940, year 2=970, year 3=1000, and year 4=1070. Calculate two price indices, one using year 1 as the base year (set equal to 100) and the other using year 4 as the base year (set equal to 100). Then, calculate the inflation rate based on the first price index. If you had used the other price index, would you get a different inflation rate? If you are unsure, do the calculation and find out.If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 monthsOil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China.With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. HyperinflationWhat is one of the potential effects of the aforementioned inflation on the South African economy?A. Decreased purchasing power of money.B. Increased consumer savings.C. Reduced interest rates on loans.D. Higher demand for imports.
- Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China. With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. HyperinflationConsider an economy that has a steady inflation rate of 1.5 percent per year. In such an economy, in how many years does a dollar lose half its value? (I would really appreciate a step by step, I genuinely want to learn how to calculate the problem)Which of the following does NOT accurately describe inflation rates? Question 3Answer a. They can be positive, negative or equal to zero b. They can be derived from Consumer Price Index c. They capture the persistent changes in the general price levels d. They magnify the values of real GDP
- If inflation rises unexpectedly by 5%, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: a. A union member with a COLA wage contract b. Someone with a large stash of cash in a safe deposit box c. A bank lending money at a fixed rate of interest d. A person who is not due tor receive a pay raise for another 11 monthsAfter graduating from college in 2020, Art Major's starting salary is $40757.0040757.00. Suppose Art Major has a cost of living adjustment (COLA) clause, or an escalator clause, in his labor contract so that he will be able to maintain this same level of purchasing power in real terms in 2021 and 2022. Using the information in the table, how much will Art Major earn in 2021 and 2022 if his salary keeps up with inflation? Round your answers to the nearest dollar. Year CPI 2020 101.77 2021 106.80 2022 109.35 What is Art Major's salary in 2021? $ What is Art Major's salary in 2022? $If inflation rises unexpectedly by 5%, indicate foreach of the following whether the economic actor ishelped, hurt, or unaffected:a. A union member with a COLA wage contractb. Someone with a large stash of cash in a safedeposit boxc. A bank lending money at a fixed rate of interestd. A person who is not due to receive a pay raise foranother 11 months
- Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines and the union both agree that real wages should increase by 2%. Inflation is expected to be 3%, so they agree on a 5% nominal wage increase. Now, suppose inflation turns out to be higher than expected, coming in at 4%. This would______the union and ________Friendly Airlines because the real wage increase would now be ________ .A government is considering introducing a new trade policy that would rescind existing free trade agreements and impose import tariffs. -what effect would this have on natural unemployment rate -whould this shift the phillips curve up or down?In Zimbabwe the increase charge of the quantity of coins prolonged from fifty percent a year to 66,700 percent a year in 2007. Accordingly the inflation charge in Zimbabwe skyrocketed, from 56 percent a year in 2000 to 24,000 percent a year in 2007. The increase charge of real GDP amongst the ones years is extra tough to diploma but have become probably -30 percent in keeping with year. a. How can we understand that Zimbabwe's referred to inflation amongst 2003 and 2007 is sort of simply below the real inflation charge?
