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Statistics for Business and Economics13th EditionDavid R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams 1,691 solutions What is the effect of inflation on the economy?In an inflationary environment, unevenly rising prices inevitably reduce the purchasing power of some consumers, and this erosion of real income is the single biggest cost of inflation. Inflation can also distort purchasing power over time for recipients and payers of fixed interest rates.
What are the effects of inflation quizlet?Three effects of inflation are eroded purchasing power, like how a dollar will not buy you as much chewing gum as it used to, eroded income, like when people's wages do not rise with inflation, and lower returns from interest, like when a bank's interest rate matches the inflation rate, savers break even.
What is inflation and how does it affect the economy quizlet?Inflation means an increase in the general price level. This means that money loses its value over time so you cannot buy as much with the income you receive. What is deflation. Deflation is when the general level of prices falls. You just studied 21 terms!
What are 3 possible effects of inflation?3 Ways Inflation Hurts Consumers and the Economy. Less Purchasing Power. The most obvious impact of inflation is that it hurts your purchasing power. ... . Less Savings. ... . Loss of Goods and Services.. |
What is the effect of inflation on the economy quizlet?
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