Inflation hurts debtor and creditors. True False | Homework.Study.com (2024)

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• Inflation hurts creditors who anticipate it. True False
• Creditors are helped and debtor and harmed during unanticipated high levels of inflation. True or False?
• Answer true or false: Creditors are helped and debtors are harmed during unanticipated high levels of inflation.
• Answer true or false: Inflation is a serious problem because inflation causes real wages to decline.
• Inflation is a problem because it erodes nominal wage growth. True or False?
• True or false? People on fixed incomes are particularly hurt by inflation.
• True or false? Inflation means that all prices are rising.
• Inflation does not affect savings in the economy. True False
• Determine whether the following statement is true, false, or uncertain: Inflation hurts borrowers and helps lenders, because borrowers must pay a higher rate of interest.
• Economists regard some inflation as good for the economy. a. True b. False
• Explain whether the following statement is true, false, or uncertain: "Inflation hurts borrowers and helps lenders, because borrowers must pay a higher rate of interest."
• True or false? Economists care about inflation because inflation affects returns on monetary assets.
• If profit and wages are both rising during inflation, the inflation must be cost-push inflation. A. True B. False
• All prices rise evenly during periods of inflation and deflation. True or False?
• Lenders are helped by unanticipated inflation. a. True. b. False.
• True or false? Economists are concerned about inflation because real GDP is necessarily falling when there is inflation.
• True or False: When inflation is lower then expected inflation rate, its good for lenders and bad for borrowers.
• Inflation makes money an imperfect store of value. a. True b. False
• Inflation, on average, makes people neither richer nor poorer. Therefore it has no cost. a. True. b. False.
• State true or false and justify your answer: If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive).
• Expectations of inflation are always greater than actual inflation along the long-run Phillips Curve. True or False?
• Explain whether the following statements are true or false. a. Inflation hurts borrowers and helps lenders because borrowers must pay a higher rate of interest. b. If prices change in a way that leaves the overall price level unchanged, then no one i
• True or false? Most economists believe that some inflation will occur when the economy is growing.
• Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power. True False
• State true or false and justify your answer: Inflation increases the value of money.
• True or false? Economists are concerned about inflation because inflation generally causes unemployment rates to rise.
• True or false? Economists are concerned about inflation because inflation increases the value of peoples' savings and encourages overspending on goods and services.
• The demand-pull theory of inflation states that inflation can be caused when there is too much money in the economy. a) True b) False
• The inflation rate in the United States has always been positive. a. False b. True
• State True or False: When there is demand-pull inflation, people's total spending in the economy will be falling.
• True or false? If there was inflation in the United States, the Federal Reserve would decide to lower interest rates.
• Answer true or false: To protect themselves from the effects of inflation, lenders try to estimate the expected rate of inflation.
• True or False: When an economy is experiencing inflation, the prices of all goods and services in the economy are increasing.
• Explain whether the following statements are true, false, or uncertain. a. Inflation hurts borrowers and helps lenders, because borrowers must pay a higher rate of interest. b. If prices change in a way that leaves the overall price level unchanged,
• Demand-pull inflation is due to excessive spending on goods and services. Is this True or False?
• Demand-pull inflation is due to excessive spending on goods and services. \\ A. True B. False
• If the consumer price index increases from 125 to 130 in one year, the inflation rate is 4%. State whether True or False.
• True or false? Economists care about inflation because inflation acts as a tax on money holdings.
• True or false? Inflation unfairly redistributes income away from savers and lenders and towards spenders and borrowers.
• True or false? A restrictive monetary policy is used when the government is concerned about suddenly increasing inflation.
• True or false? Inflation redistributes income unfairly, away from those on fixed incomes.
• True or false? Persistent budget deficits always lead to higher inflation.
• A central bank that engages in inflation targeting is following a monetary rule. a. true b. false
• True or false? The nominal interest rate is related to inflation.
• If the Fed were to unexpectedly increase the money supply, creditors would gain at the expense of debtors. True or false?
• If a price index such as the CPI increases from 400 to 410, this represents 2.5% inflation. a. True. b. False.
• There is an interest rate effect, an impact of Inflation on interest rates. True False Depends
• True or false? Economists care about inflation because inflation can add uncertainty to economic decision-making.
• If increases in government spending lead to inflation, the value of the multiplier is reduced. True or false?
• People with incomes that rise more slowly than the rate of inflation enjoy an increase in purchasing power. True or False
• True or false? When expected inflation increases, the real interest rate falls.
• If the inflation rate is 3% and the real interest rate is 4%, then the nominal interest rate is 1%. True or false?
• True or false? Because government policymakers do not consider inflation desirable, their policies cannot be the source of inflation.
• When expected inflation rate is constant, we would not observe trade off between inflation and unemployment. true or false
• State True or False. Inflation makes it less difficult to interpret the information conveyed by prices.
• Real wages are determined by multiplying money wages by the CPI. a. True. b. False.
• A consumer price index change from 130 to 135 reflects a 3.85% inflation rate. State whether True or False.
• True or False: When the economy is experiencing demand-pull inflation, its real GDP tends to be rising.
• An increase in the growth rate of the money supply raises both real growth and inflation in the long run. a. True. b. False.
• An expansionary gap generally creates inflationary pressure in an economy. True False
• True or false? When inflation is below its anticipated level, lenders typically gain at the expense of borrowers.
• If inflation is higher than expected, it benefits people who earn interest income. a. True. b. False.
• Two of the most important macroeconomic issues are unemployment and inflation. a. True b. False
• True or false? In general, when the economy is in recession and jobs are hard to find, inflation tends to fall.
• True or false? Too much demand for goods and services can result in cost-push inflation.
• Money is debt. a. True b. False
• Explain whether the following statement is true, false, or uncertain: "Inflation does not reduce the purchasing power of most workers."
• True or false? Countries that use inflation targeting attempt to set the inflation rate to zero.
• Inflation is a sustained or continuous rise in the general price level in the economy. a. True b. False
• True or False and why? When inflation is rising, then there is a decrease in the purchasing power for the consumer and the rate of the inflation is the same for all products that a consumer may buy.
• Determine whether the following statement is true, false, or uncertain: Inflation does not reduce the purchasing power of most workers.
• A particular problem for Japan is the high rate of inflation. True False
• If inflation occurs, gross domestic product (GDP) will rise at a faster rate then real GDP. True False
• An increase in the inflation rate permanently reduces the natural rate of unemployment. a. TRUE b. FALSE
• True or false? Contractionary fiscal policy is used when the government seeks to reduce suddenly surging inflation.
• True or False: In a closed economy, inflation represents a decline in average real income.
• During a period of high inflation and high inflationary expectations, one would logically expect the demand for money to be increasing. A. True. B. False.
• True or False: Inflation can be increased by either an increase in AD or AS.
• Answer true, false, or uncertain: Hyperinflation may distort prices, but they have no effect on real output.
• If both the potential lender and the potential borrower correctly anticipate the rate of inflation, inflation will not redistribute wealth from the creditor to the debtor. True False Explain.
• True or false? Policymakers can exploit the inflation-unemployment trade-off only temporarily.
• True or false? Inflation affects only the more advanced countries whereas less advanced countries face deflation.
• True or false? Inflation is not possible under the gold standard.
• True or false? Inflation interferes with the efficient allocation of resources by distorting price signals.
• State true or false and justify your answer: Too little money causes deflation in the economy.
• A negative aggregate demand shock would cause an increase in the inflation rate. Select one: A. True B. False
• Imagine an economy has suffered a financial crisis. It is stuck at a low level of income at the ZLB. One way to stimulate the economy back the original level of income might be for the FED to convince people that inflation will increase. True or false? Ex
• True or false: Serious inflation can be due to the actions of government authorities, central banks or fractional reserve banking.
• The money (nominal) interest rate will be less than the real interest rate only when deflation is occurring. a. True. b. False.
• If we expect future inflation, the short run AS will increase. True or false? If false, explain why.
• Politicians eagerly use contractionary policies that control inflation since unemployment is not a concern. Is this True or False?
• True or false? If the nominal interest rate is 5% and the inflation rate is 2.5%, this means the real interest rate is 2.5%.
• True or false? If the nominal interest rate is 5% and the inflation rate is 4%, this means the real interest rate is 9%.
• True or false: Any inflation in a fractional-reserve system must be due bank management decisions.
• The closer the economy comes to full employment the greater the inflation rate will be. a. true b. false
• True or false? Even when inflation is perfectly anticipated, some individuals will experience a cost.
• Raising inflation can permanently lower the unemployment rate. True or false? Explain.
• The more volatile the inflation rate, the weaker the money supply as a standard of deferred payment. a. True. b. False.
• Indicate whether the following statements are true, false, or uncertain: a) Inflation hurts borrowers and helps lenders because borrowers must pay a higher rate of interest. b) If prices change in a w
• Economists who accept the Quantity Theory of Money argue that inflation is not a monetary phenomenon. True False