09 Nov Economics
Please answer two of the following three questions:
1) Why do you think the U.S. experience with inflation over the last 50 years has been so much milder than in many other countries?
2) If, over time, wages and salaries on average rise at least as fast as inflation, why do people worry about how inflation affects incomes?
3) . If inflation rises unexpectedly by 5%, indicate for each of the following whether the economic actor is helped, hurt, or unaffected:
a. A union member with a COLA wage contract
b. Someone with a large stash of cash in a safe
deposit box
c. A bank lending money at a fixed rate of interest
d. A person who is not due to receive a pay raise for another 11 months
