Reference no: EM132422542
Question 1: Briefly discuss two problems associated with inflation.
Question 2: What is the generally the percentage change in velocity of money in the economy? Why?
Question 3: The Consumer Price Index (CPI) in the year 2016 was 120. In the year 2017, the CPI is 132. What is the inflation in the economy?
Question 4: Chandler graduated from college in 1989. His salary was 100,000. How much should be your annual salary, to have the same standard of living as Joe, if you were to graduate in the year 2017. Some important information: the CPI in 1989 was 120, the CPI in year 2000 was 200 and CPI in year 2017 is 240.
Question 5: Inflation is purely a monetary phenomenon. Explain.
Question 6: In the long run, money supply is neutral. Why?
Question 7: Briefly discuss two challenges in measuring inflation.
Question 8: What is the Velocity of Money?
Question 9: If the nominal interest rate is 8% while the inflation rate is 10%, then what is the real rate of return for lenders?