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Lukecrayonz Group Title

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

  • 2 years ago
  • 2 years ago

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  1. Shane_B Group Title
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    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?

    • 2 years ago
  2. Lukecrayonz Group Title
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    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.

    • 2 years ago
  3. Lukecrayonz Group Title
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    Which is why I'm asking. Yours is clearly C, but I feel like A is a trick.

    • 2 years ago
  4. Shane_B Group Title
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    Even if you make 10 times more...it doesn't mean you can buy more per your dollar when inflation increases.

    • 2 years ago
  5. suneja Group Title
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    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.

    • 2 years ago
  6. Lukecrayonz Group Title
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    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)

    • 2 years ago
  7. Shane_B Group Title
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    I don't think this particular question is ambiguous at all :)

    • 2 years ago
  8. Lukecrayonz Group Title
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    |dw:1348639774849:dw| What is the base year?

    • 2 years ago
  9. suneja Group Title
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    yr 1

    • 2 years ago
  10. Lukecrayonz Group Title
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    Any reason? Is it because it's 100 (1.0) or because its the first year?

    • 2 years ago
  11. Shane_B Group Title
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    "Base" year in everything I've seen is always the first year.

    • 2 years ago
  12. Lukecrayonz Group Title
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    Between year 2 and 3, prices rose by approximately:

    • 2 years ago
  13. Shane_B Group Title
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    106.5-103

    • 2 years ago
  14. Lukecrayonz Group Title
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    B, i just like to type it out just incase someone else happens to have these questions in the future

    • 2 years ago
  15. Lukecrayonz Group Title
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    If prices rose by 5.4% in year 5, then the CPI in year 5 is approximately:

    • 2 years ago
  16. suneja Group Title
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    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

    • 2 years ago
  17. Lukecrayonz Group Title
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    116.4

    • 2 years ago
  18. Shane_B Group Title
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    111*1.054

    • 2 years ago
  19. Lukecrayonz Group Title
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    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.

    • 2 years ago
  20. JakeV8 Group Title
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    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

    • 2 years ago
  21. Lukecrayonz Group Title
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    And oh right Shane.

    • 2 years ago
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