Economics?

Question

Developing countries tend to have...

A.more disinflation than developed countries
B.lower rates of inflation compared to developed countries
C.inflation more often than developed countries
D.on average higher rates of infaltion than the developed countries

2.Unanticipated infalation...

A.another way that the government taxes households
B.creates both winners and losers from the higher inflation
C.unambiguously is harmful to everyone in the economy
D.allows households to adjust their financial holdings to lessen the impact of inflation

3.When there is unanticipated inflation..

A.fixed interest rate borrowers benefit
B.variable interest rate lenders benefit
C.fixed interest rate lenders benefit
D.variable interest rate borrowers benefit

4.Which of the following is the best example of indexing?

A.trading a domestic currency for US dollars
B.simply calculating the inflation rate is known as indexing
C.adjusting a variable to keep up with the infaltion rate

Answer 1

d
b
b
a

Answer 2

developing countires tendo to have both higher rates of inflation and spiraling inflation periods more often than developed countries. check the imf weo database on imf.org for statistics since the 80s.

unanticipated inflation... C.

when there is unanticipated inflation... b.

last q... c.

santa barbara is wrong in qs 2 and 4.

on q 2 he says B. i can hardly think of anyone benefiting from inflation directly. a government from a country with no independent central bank can command that central bank to print more money, thus generating inflation. the govt will benefit for some time but history has shown it ends up in a crisis. read about argentinas recent economic crises. also holders of bond from that country may benefit, as a crisis there will make those bonds yield more, but thtas another story.

on q 4 he says a. trading 1 unit of any currency per 1 one dollar, as the proposition suggests, is called pegging the exchange rate, not indexing. its similar but not the same thing. indexing is, for example, setting the 2007 minimum wage in accordance to inflation. if prices rose 2%, then wages must be increased by 2%. this is called a nominal increase, as wages only keep their 2006 purchasing power. a further increase (more than the nominal 2%) is called a real increase.

Answer 3

Do you fairly comprehend furnish area economics? this is not basically approximately reducing taxes on corporation vendors; it focuses on the two rules that help boost capital for clean and increasing companies and on the expenditures of production. The "undemanding awareness" isn't continuously mind-blowing. so which you're able to particularly government pass to each and all of the worry and cost and administrative fee to tax a corporation and then spend money with companies as a exchange of basically letting companies keep their very own stressful-earned money first of all? that would not make lots experience, the two.