Which of the following statements is false?
A. Some people in society benefit from inflation.
B. An individual living on a fixed income is always made worse off as a result of inflation.
C. Those individuals receiving welfare benefits have been harmed by inflation because increases in welfare payments have not kept pace with inflation.
D. Inflation will have no effect on an individual whose income is indexed to the inflation rate.
Answer: D
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Many believe that fairness calls for higher income taxes on the wealthy. Using one of the “Ideas for Beyond the Final Exam,” explain how higher taxes on the wealthy will affect output.
What will be an ideal response?
Compare and contrast the relative elasticities that you are likely to find between toothpicks and furniture. Explain your answer
What will be an ideal response?
During which of the following periods did the U.S. economy have mostly small trade surpluses?
a. From the 1950s into the 1960s b. From the 1960s into the 1970s c. From the 1960s into the 1980s d. From the 1970s into the 1980s
When a tax is justified on the basis that the taxpayers who pay the tax receive specific government services from payment of the tax, the tax
a. is considered horizontally equitable. b. burden is minimized. c. satisfies the benefits principle. d. is considered vertically equitable.