One year ago Sam purchased bonds for $100,000.He just sold them for $120,000.During the year the price level rose by 5%.If the tax rate on capital gains is 20%,how much did Sam gain in real terms?

The answer of One year ago Sam purchased bonds for...

An increase in the price level causes the value of money to_____.Therefore,people will want to hold _____ money,because the cost of their purchases has increased.

The answer of An increase in the price level causes...

If velocity is 6,real output is 10,000,and M is 20,000 what would the price level be? If M increases to 25,000 but V and Y do not change,what happens to the price level? Are the change in the money supply and the change in the price level proportional?

P = MV/Y. With the numbers giv...

If the inflation rate was 8%,and the tax rate was 20%,and you deposited money in a bank account that pays 12%,what is your after tax real interest rate? Show you work.

The after tax nominal interest...

Explain the adjustment process in the money market that creates a change in the price level when the money supply increases.

When the money supply increases, there i...

The costs a business incurs to change its prices are called ___________.

The answer of The costs a business incurs to change...

Economists agree that increases in the money-supply growth rate increase inflation and that inflation is undesirable.So why have there been hyperinflations and how have they been ended?

Typically, the government in countries t...

Does an increase in the inflation rate increase or decrease the amount of money people choose to hold at any given price level? What would an increase in the inflation rate do to money demand? What would this change in money demand do to the price level?

An increase in inflation reduc...

Wages and prices are many times higher today than they were 30 years ago,yet people do not work a lot more hours or buy fewer goods.How can this be?

Inflation has raised the general price l...

According to the classical dichotomy,what changes nominal variables? What changes real variables?

The classical dichotomy argues that nomi...

If inflation is less than expected,who is wealth redistributed to?

The answer of If inflation is less than expected,who is...

The consumer price index increases from 200 to 208.What is the inflation rate?

The answer of The consumer price index increases from 200...

It takes more money to purchase the same amount of goods when prices __________.Therefore,the value of your money has__________.

The answer of It takes more money to purchase the...

The nominal interest rate is eight percent and the consumer price index rises from 140 to 147.What is the real interest rate?

The answer of The nominal interest rate is eight percent...

Exam 17: Money Growth and Inflation: Part A

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Exam 17: Money Growth and Inflation: Part A

It takes more money to purchase the same amount of goods when prices __________.Therefore,the value of your money has__________.

Correct AnswerverifiedShow Answer

One year ago Sam purchased bonds for $100,000.He just sold them for $120,000.During the year the price level rose by 5%.If the tax rate on capital gains is 20%,how much did Sam gain in real terms?

Correct AnswerverifiedShow Answer

If the inflation rate was 8%,and the tax rate was 20%,and you deposited money in a bank account that pays 12%,what is your after tax real interest rate? Show you work.

Correct AnswerverifiedThe after tax nominal interest...View AnswerShow Answer

The quantity equation is expressed as_____.The rate at which money changes hands is known as ______.

Correct AnswerverifiedM x V = P ...View AnswerShow Answer

Wages and prices are many times higher today than they were 30 years ago,yet people do not work a lot more hours or buy fewer goods.How can this be?

Correct AnswerverifiedInflation has raised the general price l...View AnswerShow Answer

During the late 19th century, the U.S. price level fell. This unexpected increase in the real cost of borrowing caused wealth to be redistributed from _____ to _____.

Correct Answerverifieddebtors/bo...View AnswerShow Answer

If velocity is 6,real output is 10,000,and M is 20,000 what would the price level be? If M increases to 25,000 but V and Y do not change,what happens to the price level? Are the change in the money supply and the change in the price level proportional?

Correct AnswerverifiedP = MV/Y. With the numbers giv...View AnswerShow Answer

When the consumer price index increases,the value of your money has _____.According to the quantity theory of money this is caused by an increase in the _____.

Correct Answerverifiedfallen, mo...View AnswerShow Answer

The costs a business incurs to change its prices are called ___________.

Correct AnswerverifiedShow Answer

In the long run inflation is explained by _______.For countries that had hyperinflation this source of inflation arose primarily because the government __________.

Correct Answerverifiedrapid money supply g...View AnswerShow Answer

A decrease in the overall price level (or falling prices) is called _____. An extraordinarily high rate of inflation is called _____.

Correct Answerverifieddeflation,...View AnswerShow Answer

If inflation is less than expected,who is wealth redistributed to?

Correct AnswerverifiedShow Answer

Does an increase in the inflation rate increase or decrease the amount of money people choose to hold at any given price level? What would an increase in the inflation rate do to money demand? What would this change in money demand do to the price level?

Correct AnswerverifiedAn increase in inflation reduc...View AnswerShow Answer

According to the Fisher effect,if the central bank raises the rate of money supply growth,what happens to the nominal and the real interest rate?

Correct AnswerverifiedThe nominal interest...View AnswerShow Answer

Economists agree that increases in the money-supply growth rate increase inflation and that inflation is undesirable.So why have there been hyperinflations and how have they been ended?

Correct AnswerverifiedTypically, the government in countries t...View AnswerShow Answer

The nominal interest rate is eight percent and the consumer price index rises from 140 to 147.What is the real interest rate?

Correct AnswerverifiedShow Answer

According to the classical dichotomy,what changes nominal variables? What changes real variables?

Correct AnswerverifiedThe classical dichotomy argues that nomi...View AnswerShow Answer

An increase in the price level causes the value of money to_____.Therefore,people will want to hold _____ money,because the cost of their purchases has increased.

Correct AnswerverifiedShow Answer

Explain the adjustment process in the money market that creates a change in the price level when the money supply increases.

Correct AnswerverifiedWhen the money supply increases, there i...View AnswerShow Answer

The consumer price index increases from 200 to 208.What is the inflation rate?

Correct AnswerverifiedShow Answer

It takes more money to purchase the same amount of goods when prices .Therefore,the value of your money has.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The after tax nominal interest...
View Answer

The quantity equation is expressed as_.The rate at which money changes hands is known as __.

Correct Answer
verified
M x V = P ...
View Answer

Correct Answer
verified
Inflation has raised the general price l...
View Answer

During the late 19th century, the U.S. price level fell. This unexpected increase in the real cost of borrowing caused wealth to be redistributed from _ to _.

Correct Answer
verified
debtors/bo...
View Answer

Correct Answer
verified
P = MV/Y. With the numbers giv...
View Answer

When the consumer price index increases,the value of your money has _.According to the quantity theory of money this is caused by an increase in the _.

Correct Answer
verified
fallen, mo...
View Answer

Correct Answer
verified

In the long run inflation is explained by _.For countries that had hyperinflation this source of inflation arose primarily because the government ____.

Correct Answer
verified
rapid money supply g...
View Answer

A decrease in the overall price level (or falling prices) is called _. An extraordinarily high rate of inflation is called _.

Correct Answer
verified
deflation,...
View Answer

Correct Answer
verified

Correct Answer
verified
An increase in inflation reduc...
View Answer

Correct Answer
verified
The nominal interest...
View Answer

Correct Answer
verified
Typically, the government in countries t...
View Answer

Correct Answer
verified

Correct Answer
verified
The classical dichotomy argues that nomi...
View Answer

An increase in the price level causes the value of money to_.Therefore,people will want to hold _ money,because the cost of their purchases has increased.

Correct Answer
verified

Correct Answer
verified
When the money supply increases, there i...
View Answer

Correct Answer
verified