If people expect inflation to increase in the future, explain what will happen to consumption and saving
They will try to beat the future price increases by increasing their current level of consumption. They will
simultaneously reduce their current level of saving, since inflation will erode the purchasing power of
saved income.
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If market interest rates increase, the prices of existing bonds will
A) decrease. B) not change. C) increase. D) decrease if Real GDP decreases and increase if Real GDP increases.
If the annual growth rate in Real GDP is 2 percent, then it will take 50 years for the economy to double in size
Indicate whether the statement is true or false
If the exchange rate between the yen and the dollar changes from 100 yen = $1 to 110 yen = $1, then:
A. the dollar has depreciated in value. B. U.S.-made goods will become less expensive to Japanese citizens. C. the dollar has appreciated in value. D. Japanese-made goods will become more expensive to U.S. citizens.
Compared to the leader countries, the follower countries can grow at a faster rate because:
What will be an ideal response?