Lukecrayonz
  • Lukecrayonz
The purchasing power of the dollar: A) cannot be predicted during inflationary periods B) is unaffected by inflation C) decreases during inflationary periods D) increases during inflationary periods
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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katieb
  • katieb
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Shane_B
  • Shane_B
If inflation goes up, the value of the dollar goes down...which means you can't buy as much for each dollar. Which answer does that match?
Lukecrayonz
  • Lukecrayonz
It's either A or C, but just because inflation goes up doesn't mean you can't buy as much, your real income may increase.
Lukecrayonz
  • Lukecrayonz
Which is why I'm asking. Yours is clearly C, but I feel like A is a trick.

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More answers

Shane_B
  • Shane_B
Even if you make 10 times more...it doesn't mean you can buy more per your dollar when inflation increases.
anonymous
  • anonymous
during inflation value of currency depreciates, ie with the same amt of money u can now buy less of goods. wic means purchasing power of currency (here dollar ) decreases during inflation.
Lukecrayonz
  • Lukecrayonz
It's just my teacher, she insists on making it confusing. She wrote the textbook and workbook, so she may mean it a different way. Thanks though! I have another question (or few)
Shane_B
  • Shane_B
I don't think this particular question is ambiguous at all :)
Lukecrayonz
  • Lukecrayonz
|dw:1348639774849:dw| What is the base year?
anonymous
  • anonymous
yr 1
Lukecrayonz
  • Lukecrayonz
Any reason? Is it because it's 100 (1.0) or because its the first year?
Shane_B
  • Shane_B
"Base" year in everything I've seen is always the first year.
Lukecrayonz
  • Lukecrayonz
Between year 2 and 3, prices rose by approximately:
Shane_B
  • Shane_B
106.5-103
Lukecrayonz
  • Lukecrayonz
B, i just like to type it out just incase someone else happens to have these questions in the future
Lukecrayonz
  • Lukecrayonz
If prices rose by 5.4% in year 5, then the CPI in year 5 is approximately:
anonymous
  • anonymous
base yr is something that u take as a measuring rod and with respect to that u compare the other variable. so i think i shud be yr 1. wats the correct ans to tis
Lukecrayonz
  • Lukecrayonz
116.4
Shane_B
  • Shane_B
111*1.054
Lukecrayonz
  • Lukecrayonz
Inflation is: A) not regarded as an economic problem because every person's nominal income rises in proportion to the increase in the price level B) Regarded as an economic problem because every person's nominal income rises in proportion to the increase in the price level C) REgarded as an economic problem because it can have redistributive effects, lead to increased speculation, and cause greater uncertainty D) Regarded as an economic problem because where there is inflation, everyone is worse off.
anonymous
  • anonymous
Unless this is some trick question concerning relative exchange rates with foreign currencies, the answer must be (C). Given a certain number of dollars and holding everything else constant, purchasing power decreases during inflationary periods. Increasing one's income doesn't change the issue... every dollar in today's economy purchase relatively less in tomorrow's economy if inflation is occurring
Lukecrayonz
  • Lukecrayonz
And oh right Shane.

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