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If expected inflation increases interest rates are likely to increase?
Yes, inflation and increases in interest rates usually go hand-in-hand, though inflation is not the sole cause of an increase in interest rates
Higher consumer prices are likely to be accompanied by?
Prices can be accompanies by either inflation, an increase in real wages, or a decrease in consumption.
What will happen to the exchange rate if a country has low inflation and rapid economic growth?
Exchange rates would most likely stay the same. If inflation increase or decreases I believe that is where exchange rates will more so be affected
What is likely to happen to yield to maturity on bonds in the marketplace if inflationary expectations increase?
The prices of bonds will fall and yields to maturity (or call date) will rise, since investors will require greater yields on their investments to offset the expected increase in inflation.
What is the CPI most likely measuring?
inflation and deflation
A depreciation in the external value of the currency is likely to...?
increase inflation
If expected inflation increases interest rates are likely to increase?
Yes, inflation and increases in interest rates usually go hand-in-hand, though inflation is not the sole cause of an increase in interest rates
Higher consumer prices are likely to be accompanied by?
Prices can be accompanies by either inflation, an increase in real wages, or a decrease in consumption.
What will happen to the exchange rate if a country has low inflation and rapid economic growth?
Exchange rates would most likely stay the same. If inflation increase or decreases I believe that is where exchange rates will more so be affected
What is the CPI most likely measuring?
inflation and deflation
What is likely to happen to yield to maturity on bonds in the marketplace if inflationary expectations increase?
The prices of bonds will fall and yields to maturity (or call date) will rise, since investors will require greater yields on their investments to offset the expected increase in inflation.
When the actual inflation rate is greater than the anticipated inflation rate what is most likely to suffer?
The question is incomplete.
An unexpected increase in total spending will cause an increase you?
An unexpected increase in total spending will likely lead to inflation as demand outweighs supply, putting upward pressure on prices. This can result in an increase in the general price level of goods and services, eroding purchasing power and potentially leading to a decrease in real income for consumers.
What groups would most likely be hurt financially by unexpected inflation?
which of the following group is most hurt by unexpected inflation
What is most likely to lead to an increase in the underlying rate of inflation?
Inflation at its core is a monetary problem. It is simply too much money chasing too few goods. The father of this theory is Milton Friedman (see link below).Rapidly rising production costs
Why would sellers hold durable goods off the market during a period of inflation?
This is chiefly due to the illusion of money. By definition, inflation is an increase in the general price level. And durable consumer goods and goods that consumers are not likely to buy again for an extended period of time. Therefore, sellers believe that they will make more money if they sell the good when the prices are higher as to increase profit although this belief is offset by an increase in prices of all other goods.
Debtors or creditors would be more likely to favor inflation?
Debtors.
