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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Rosalie the Retiree knows that when she retires in Chapter 22, Problem 37P, Rosalie the Retiree knows that when she retires in years, her company will give her a one-time , example  1 years, her company will give her a one-time payment of Chapter 22, Problem 37P, Rosalie the Retiree knows that when she retires in years, her company will give her a one-time , example  2 However, if the inflation rate is Chapter 22, Problem 37P, Rosalie the Retiree knows that when she retires in years, her company will give her a one-time , example  3 per year, how much buying power will that Chapter 22, Problem 37P, Rosalie the Retiree knows that when she retires in years, her company will give her a one-time , example  4 have when measured in today’s dollars? Hint: Start by calculating the rise in the price level over the Chapter 22, Problem 37P, Rosalie the Retiree knows that when she retires in years, her company will give her a one-time , example  5 years.

To determine

To write: The impact of the inflation rate of 6% over the buying power in today’s time with respect to last 16 years.

Explanation

We can determine the price level after 16 years by considering inflation of 6 % inflation rate in a year and by considering base price level as 100.

  Price level after 16 years=[1+6 100]16×100Price level after 16 years=[ 106 100]16×100Price level after 16 years=(1

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