标题: Reading 25: U.S. Inflation, Unemployment, and Business Cycles [打印本页]
作者: honeycfa 时间: 2010-4-17 11:26 标题: [2010]Session 6-Reading 25: U.S. Inflation, Unemployment, and Business Cycles
LOS a: Differentiate between inflation and the price level.
Which of the following statements regarding inflation is most accurate?
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A) |
As a result of inflation, all borrowers gain at the expense of lenders. | |
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B) |
Inflation is a persistent increase in the general price level of goods and services. | |
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C) |
The purchasing power of money increases as a result of inflation. | |
Inflation is defined as a persistent increase in the price level over time. Inflation indicates that there has been a general decline in the purchasing power of a currency. Fixed-rate borrowers gain at the expense of lenders when inflation is greater than expected.
作者: honeycfa 时间: 2010-4-17 12:53
If the consumer price index (CPI) at year-end was 142 and the beginning of the year was 135, then the rate of inflation during the year is:
The inflation rate can be calculated as (142 –135) / 135 = 5.2%.
作者: honeycfa 时间: 2010-4-17 12:54
Which of the following statements regarding inflation is most accurate?
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A) |
Inflation occurs when there is a steady increase in the relative prices of key commodities. | |
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B) |
An economy experiences inflation when there is a persistent increase in the prices of almost all goods and services. | |
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C) |
Inflation is present if the prices of some goods and services are increasing. | |
Inflation is a persistent increase in the price level over time. Inflation occurs when there is a sustained increase in the prices of almost all goods and services. Inflation indicates a decline in the purchasing power of a currency.
作者: honeycfa 时间: 2010-4-17 12:54
During the seminar, “Inflation – Friend or Foe?” Joe Lebow, an analyst with Greenwald & Associates, was discussing the difference between inflation and price level. He made the following two statements:
Statement 1: To measure the inflation rate of a currency, one should calculate the annual percentage change in the price level. The calculation of this change shows the connection between the inflation rate and the price level.
Statement 2: The higher the price level in the current year compared to the price level in the previous year, the higher is the inflation rate of a country. Any increase in the price level is evidence of (positive) inflation.
Are the statements as made by Lebow regarding inflation and price levels CORRECT?
Statement 1 is correct. However, Statement 2 is incorrect because a one-time increase in the price level is not necessarily inflation. Inflation is an on-going process; not a one-time increase in the price level.
作者: honeycfa 时间: 2010-4-17 12:54
[此贴子已经被作者于2010-4-17 12:55:13编辑过]
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