The Treasury inflation-protected security (TIPS) is a bond with a principal value that fluctuates relative to changes in the consumer price index. The interest on the bond is calculated on the adjusted principal. This instrument has an advantage over a regular bond because it:
A) has a real return that is zero.
B) protects the saver against inflation.
C) has a return that matches the economic growth rate.
D) protects the saver against supply-side shocks.
Correct Answer:
Verified
Q21: Suppose rubber prices rise in international markets.
Q22: A negative supply shock causes:
A)a surplus in
Q23: If the Canadian dollar appreciates, this makes
Q24: Inflation arises due to:
A)changes in real output,
Q25: When a competitive business sets prices, it
Q27: If managers expect the inflation rate to
Q28: If managers expect inflation to approach the
Q29: If managers use strong macroeconomic knowledge and
Q30: The figure shows inflation from 2009 to
Q31: The figure shows inflation from 2009 to
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents