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Author Question: Which of the following is not an example of inflation causing a redistribution of income because the ... (Read 51 times)

KWilfred

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on: Jun 29, 2018
Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?
 
  A) Firms have to hire an extra worker to change prices in its store because of inflation.
  B) A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation.
  C) A bank collects a lower amount of interest from a loan because inflation was under-predicted.
  D) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year.

Question 2

Refer to Figure 19-7. At what level should the Indian government peg its currency to the dollar to make U.S. imports cheaper in India?
 
  A) less than .02/rupee B) equal to .02/rupee
  C) greater than .02/rupee D) 1/rupee


kilada

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

C


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