Older Americans living on a pension and therefore on a fixed income, tend to be made
a. better off when prices rise.
b. better off when the inflation rate rises.
c. worse off when prices rise.
d. worse off when prices fall.
C
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Over time in a growing economy, the long-run aggregate supply curve will
A) become horizontal at the long-run potential price level. B) shift rightward. C) shift leftward. D) become increasingly steep.
If a monopolist lowers its price and its demand is inelastic, then its
A) total revenue increases. B) total revenue decreases. C) total revenue does not change. D) total revenue is negative.
You make a loan to the government of $100. The government promises to pay you back some sum of money in two years. The interest rate will be 4 percent over that period, but inflation will be 4 percent. How much will you require that the government pay you in two years in the absence of any inflation? With inflation?
What will be an ideal response?
Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?
A) The relative price of coffee has increased compared to tea. B) The money price of coffee has increased. C) The law of supply explains why the price of coffee has increased. D) Jane will stop consuming coffee.