Reading 26: Inflation - LOS b ～ Q1-2

答案和详解如下：

1.Which one of the following is most likely to experience loss of wealth from an unanticipated increase in the inflation rate?

A)   An individual investor who recently purchased a substantial amount of variable rate bonds.

B)   A commercial bank that has a large quantity of fixed-rate mortgages in its loan portfolio.

C)   An individual investor who financed the purchase of a home with a 30-year fixed rate mortgage.

D)   A member of a union who is employed under a five-year collective-bargaining agreement with increases each year to adjust for inflation.

The correct answer was B)

If an economy experiences unanticipated inflation then the losers will be those people who are holding long-term contracts in which they are to receive fixed payments. A bank that has a large quantity of fixed-rate mortgages in its loan portfolio (i.e., they are investments for the bank) is receiving fixed-rate payments. The other choices are all investors who are either making fixed rate payments (the homeowner) or receiving floating-rate payments (the union contract with an escalator clause and the investor in variable rate bonds).

2.Which of the following factors would least likely result in demand-pull inflation? An increase in:

A)   exports.

B)   the wage rate.

C)   the quantity of money.

D)   government spending.

The correct answer was B)

Demand-pull inflation can result from any factor that increases aggregate demand, including increases in the money supply, increases in exports, and increases in government purchases. Increases in the money wage rate or the prices of other productive inputs would result in cost-push inflation as aggregate supply decreases.