ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 3.6P
To determine
Sources of inflation using aggregate
Introduction:
Aggregate demand is the total consumption (spending) of (on) the goods and services in the economy.
Aggregate supply is the total quantity of the goods and services produced in the economy.
Inflation refers to the percentage increase in the prices of the goods and services in the economy over the period of time.
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7. Prices and wages are considered ‘sticky’ if:
they do not fully adjust to changes in demand and supply.
their rates of increases and decrease are identical.
as prices increase, wages increase by the same percentage.
their rates of change are directly connected to rate of change in unemployment.
15.______________Demand-pull inflation: FILL IN THE BLANK
A) occurs when total spending in the economy is excessive. B) is measured differently than cost-push inflation. C) can be present even during an economic depression. D) is also called "hyperinflation. E) is also called deflation"
3- A country is said to be experiencing inflation when
A- the goods-market is rising over time
B- prices of all goods and services are rising over time
C- Total output is falling over time
D- prices of all goods and services are falling over time
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
Question. 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.
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Question 11 The unemployment rate measures: the number of people unemployed divided by the number of people employed. O unemployed workers as a percentage of the labor force. O unemployed workers as a percentage of the population age over-sixteen. O unemployed workers as a percentage of the population.
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3. Identifying costs of inflationLarry manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
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Condition 1:National Unemployment Rate Rising,Rate of Inflation Falling.
Question1:Given the conditions presented above,what is likely to happen to spending in the economy?explain
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Question 23
If the inflation rate turns out to be less than was is expected to be, the clear winners are
businesses.
people on fixed incomes.
borrowers.
lenders.
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19-
In an economy there is a 15.2 % fall in the consumer spending on the same basket of goods and services between the years 2015 and 2016. This means that there is ____.
a.
Deflation
b.
Rise in Price level
c.
No change in price level
d.
Inflation
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Question 12
If the inflation rate turns out to be greater than was is expected to be, the clear winners are
businesses.
lenders.
borrowers.
people on fixed incomes.
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27-
Choose the statement that does not describe Microeconomics.
a.
The effect of increasing the money supply on inflation.
b.
The purchasing decisions that an individual consumer makes.
c.
All of these
d.
The effect of an increase in the Tax on cigarettes on cigarette sales
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QUESTION 4
Inflation is defined as
a.
a period of rising productivity in the economy
b.
a period of rising income in the economy
c.
an increase in the overall level of output in the economy
d.
an increase in the overall level of prices in the economy
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Question 4
1. Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have andexamine the effects of inflation in your city of residence with attention to food and accommodation expenses.
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14. The unemployed are those people who
do not have jobs.
are not employed but are seeking work
are not working
are not working
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3)
a. In general, unemployment rates are higher for
workers in lower-skilled occupations, Hispanics, women, and less-educated workers.
less-educated workers, African Americans, workers in lower-skilled occupations, and women.
African Americans, Hispanics, workers in lower-skilled occupations, and less-educated workers.
African Americans, Hispanics, women, and less-educated workers.
b. The average length of time people are unemployed rises during a recession because
most workers receive unemployment compensation and don’t want to work.
retraining takes longer during recessions.
unemployment compensation is equal to what people would earn if they were working.
businesses continue to lay off workers as a result of the decrease in demand.
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