Macroeconomics

Free Version

Upgrade subject to access all content

Easy

Nominal vs Real Values: Inflation Effects

MACRO-RNKQE9

Which of the following leads to a distortion in the impact of the rate of inflation over a time period, such as a year?

A

Individuals may have incomes that change during the time period.

B

Some prices in the basket of goods used to calculate the rate of inflation may actually fall and not rise.

C

The rate of unemployment may be changing and that might influence the rate of inflation.

D

Individual consumers may buy few of those goods whose price has risen, mitigating the impact of inflation on their standard of living.