Who is hurt and who benefits from inflation? Why?
Inflation hurts those on fixed incomes and those that save at fixed nominal rates of interest. Inflation benefits those who borrow at fixed nominal rates of interest and those whose wealth increases faster than the rate of inflation.
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The price elasticity of demand for a good measures the responsiveness of:
A. quantity demanded to a one percent change in price of that good. B. price to a one percent change in the demand for that good. C. price to a one percent change in the quantity demanded of that good. D. demand to a one percent change in price of that good.
A monopolistically competitive firm is making a positive economic profit. In the long run, which of the following is most likely?
A) It will produce less output and it will charge a lower price. B) It will produce the same output and charge the same price. C) It will produce less output but keep price the same. D) It will keep output the same but will charge a higher price.
A currency drain occurs because people want to hold some of their money as currency rather than as deposits
Indicate whether the statement is true or false
The gains from trade rely on overall productivity (absolute advantage)
Indicate whether the statement is true or false