Downvote will be given so pls Economics: What is the term used to describe inflation that is influenced by changes in 1 expectations about future price levels? a) Adaptive expectations inflation b) Rational expectations inflation c) Sticky price inflation d) Built-in inflation Which of the following is a characteristic of hyperinflation? a) Inflation rate below 10% per year b) Inflation rate above 50% per month
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- A generalization of the fisher effect that can be applied to other variables is the relationship between real price growth and nominal price growth if we know the inflation rate. We can express this relationship T, where g is the growth rate (real or nominal) and t is inflation rate. Use this as greal information for problems 10-12. gnomial - 10. Assume that data shows the nominal price of a new Nissan Maxima was $12,000 in 1992 and $15,000 in 2002, but you also found a reliable source that claimed real price growth for Maximas this claim about real price growth A) 16.5% B) 5% C) 10% D) 8.5% E) Not enough information to determine was closer to 8.5%. For experienced from 1992 to 2002? to be true, how much inflation was 11. Assume that the inflation rate is the level you found in 10. If the real price growth for a Mercedes- AMG was 10%, and the nominal price in 1992 was 2002? $42,000; what is the nominal price of the Mercedes in A) $50,000 B) $53,130 C) $56,750 D) $60,070 E) $77,000 12.…In a decelerating inflation environment (e.g. with inflation rate at 20%, 18%, 14%, .. year after year), using "adaptive inflation expectations" formation, the forecasted future inflation rate is likely to be O systematically biased upward. O systematically biased downward. O always correct. O about correct on average.Demand-pull inflation is an inflation that results from an initial Select one: а. decrease in aggregate demand O b. increase in natural resource prices O c. increase in wage rates O d. increase in the aggregate demand
- Questron 3 Suppose the nominal interest rate is currently 24 per cent and expected inflation is 16 per cent. IF the expected inflastion rate doubles to 3.2 per cent, wtich of the foloving would be an implication of the Fisher effect? O The real interest ate talls by 1.6 per cent O The nominal interant rate doubies to 48 per cent O The nominal interast rate rises n 5.6 per cent O The nominal incerest rate des co 4.0 por centAssume that an increase in aggregate demand results in a positive bargaining gap which is constant at 2%. The rate of inflation in future years will: Select one: a.Fall by 2% each year b.lncrease by 2% each year c.Remain constant at 2% per year d.Remain unchanged2. What is the eqution and shape of the modem aggregate supply curve according to imperfect infomation model? Using the equation of Aggregate Supply (AS) derive the equation of Expectation augmented Phillips curve and explain causes of inflation in tems of it. How does expectation augmented Phillips curve explain Stagflation?
- Supposethat on January 1 2009, the TL price of thedollar is 1.40 overtheyear, inflation rate in Turkey is 25 % and U.S. inflation rate is 10%. Iftheexchange rate is $1= 1.50 TL at theend of theyear, whichcurrencyappearto be overvalued.?Explain your answer.At the end of September, a barrel of light crude oil sold for almost $70 compared to a price near $30 a barrel in January 9f 2004. To answer the following questions,assume bind traders expect inflation to rise from 3% in 2005 to 5% in both 2006 and 2007. Also traders expect the American economy to enter a recession in 2007. Assume the prior to the recent run up oil prices, bond traders had expected inflation to remain stable in 2006 and 2007 at 3%. Using a model of supply and demand for one year T-Bills, illustrate and explain the impact of a recession ( a business cycle contraction) if bond traders expect that this recession will occur in 2007,what do you expect to happen to yields on one year T- Bills in 2007?My question is (c). Basically, AS curve becoming steeper can be reflected by the value of v bar increases, showing that inflation is more sensitive to SR AD shock. However, this is no impact on AS shock theoretically, as AS shock relates to the change of o bar. So I guess maybe the provided solution is wrong, could u please check it for me? Thanks a lot!
- Which of the following will increase our current inflation rate t? None of the answers are correct O a. O b. A beneficial cost shock (positive supply shock) O c. A recessionary gap in period t-1 O d. tt-1PRICE LEVEL Point D Point E Point A +H Point B +0 A LRAS +6 +8 ON REAL GOP From point A to E to B to I to C. + From point A to B to C. From point A to D to B to H to C. From point A to D to F to H to C. + SHAS Suppose the economy is self-regulating and is at point A when it experiences a one-shot, demand-induced inflation. If there are no other changes in the economy, at what point will the economy settle? SRAS SRAS, AD₁ AD₂ AD₁ Suppose the economy is at point A when it is faced with two adverse supply shocks. The Fed tries to counter these shocks by increasing aggregate demand. What path will the economy follow?QUESTION 4 Suppose you are told that the price of pears in the second period is actually 0.5. Using this information calculate the rate of inflation using the consumption basket for the first period. The answer is O Zero inflation O 25 percent inflation O 6 percent inflation O Minus 6 percent deflation O None of the above QUESTION 5 gnoring quality change generaly leads to an O Overstatement of inflation * O An understatement of inflation O Has no impact on measured inflation O There is not enough information to answer this question Will lead to deflation