ECO 102 Principles of Macroeconomics Final Questions What is inflation? Describe inflation in your own words.

  1. What is inflation? Describe inflation in your own words. Your book gives an example of ice cream prices to show inflation. What is an example of inflation you have seen in your everyday life? How has inflation impacted you personally?
  2. “Inflation raises the costs of what I buy and makes me poorer!”Do you agree or disagree with this statement and why? Please make sure to explain your reasoning thoroughly.
  3. It is well known that the U.S. government is operating at a deficit.  The government has the ability to print more money in order to cover their spending and fix the deficit.  Do you think this is a good solution to the deficit? Why or why not?  What might be a result of increasing the money supply?
  4. What are net exports and net capital flow? Explain how they are related.
  5. What is the difference between the nominal exchange rate and the real exchange rate? If a Japanese car costs 500,000 yen, a similar American car costs $10,000, and a dollar can buy 100 yen, what are the nominal and real exchange rates?

Course: ECO 102 Principles of Macroeconomics
School: Community College of Allegheny County

  • 07/05/2017
  • 2
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