The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin

تمرين 7

One of the points made in this chapter is that inflation erodes investment returns. Go to http://www.moneychimp.com/articles/econ/inflation_calculator.htm and review how changes in inflation alter your real return. What happens to the difference between the adjusted value of an investment and its inflation-adjusted value as
a. inflation increases?
b. the investment horizon lengthens?
c. expected returns increase?