What is inflation and how is it measured using the Consumer Price Index?
What will be an ideal response?
The inflation rate is the percentage change in the price level from one year to the next. In other words, it is the growth rate of the price level. The CPI is a measure of the price level and so can be used to calculate the inflation rate.
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The ________ the expected future exchange rate, the greater is the expected profit from holding dollars and so the ________
A) higher; demand curve for dollars shifts rightward B) lower; supply curve of dollars shifts rightward C) higher; demand curve for dollars shifts leftward D) higher; supply curve of dollars shifts rightward E) lower; demand curve for dollars shifts leftward
Discuss why saving and investing entails risk. What is the reward for bearing risk? Explain how income taxes affect the returns to risk bearing and its impact on overall risk taking and innovation
What will be an ideal response?