How does inflation affect people’s standards of living and savings?
What will be an ideal response?
Inflation is an increase in the overall level of prices and has a negative effect on people’s standards of living and savings. People are forced to reduce their expenditures when the price of goods and services increases but nominal wages (also known as salaries) do not change. Savings are also affected by inflation because the purchasing power of saved dollars is reduced. For example, a family with saving of $60,000 will be able to purchase fewer goods and services with those dollars if the economy is experiencing inflation.
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An economy Is divided into a primary sector or upper tier, which is composed of higher-paid workers in more secure jobs, and a secondary sector or lower tier.... these conditions are referred to as?
A time-series graph
A) shows how a variable changes over time. B) uses bars rather than lines. C) shows points in a scatter diagram. D) is similar to a cross-section graph because both can show trends over time. E) is in the shape of a pie.
If we use the numbers in the above table to draw a graph, with the price on the vertical axis and the quantity on the horizontal axis, the line relating price and quantity has a slope of
A) 0.8. B) -8.0. C) -1.25. D) 8.0.
If wages a firm pays it workers increase, then
A) the firm's long-run average cost curve shifts upward. B) the firm moves rightward along its long-run average cost curve to where it has diseconomies of scale. C) the firm's long-run average cost curve does not shift and there is no movement along the long-run average cost curve. D) the firm moves rightward along its long-run average cost curve but not necessarily to where it has diseconomies of scale.