How is inflation typically measured? What are the different types of inflation? Why is it important to know which type of inflation we may be experiencing?
What will be an ideal response?
Inflation is typically measured by the CPI. The two types of inflation are demand-pull and cost-push. Demand-pull inflation is characterized by "too many dollars chasing too few goods and service." Demand-pull inflation is caused by total spending increasing faster than real GDP. Cost-push inflation is caused by anything that increases costs of production. Knowing which type of inflation we may be suffering from is important because each type of inflation requires a different policy prescription to combat.
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The Sarbanes-Oxley Act of 2002
A) requires that CEO's personally certify the accuracy of financial statements. B) mandates that firms raise funds for expansion only through the sale of stock or from bank loans, but not from the sale of corporate bonds. C) created the Consumer Financial Protection Bureau to be housed in the Federal Reserve. D) established the Financial Stability Oversight Council to identify risks to the financial system.
A discount bond is a bond
A) with no coupon payments. B) where the price of the bond is greater than its face value. C) where the interest rate is zero. D) where the face value is zero. E) that never matures.