Which of the following is not an example of inflation causing a redistribution of income because the inflation was unexpected?
A) Firms have to hire extra workers to change prices because of inflation.
B) A firm signs a 4-year contract with a union based on a 3% expected rate of inflation per year, and the actual inflation rate ends up being 5% per year.
C) An employee receives an increase in salary that is less than the rate of inflation because management under-predicted inflation.
D) A bank collects a lower amount of interest from a loan because inflation was predicted to be 2% but was actually 4%.
Correct Answer:
Verified
Q61: A government's budget deficit is equal to
A)
Q62: All of the following are costs of
Q64: Hyperinflation can be caused by
A) the central
Q65: When a government has a large budget
Q67: The costs of inflation to households and
Q68: All else equal,if individuals save less because
Q69: As the average annual inflation rate _,the
Q70:
Q71: Which of the following is not a
Q265: In countries that have experienced hyperinflation,what role
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