Think about this: If the current unemployment rate is 3.9%, would one expect the rate of...
- Think about this: If the current unemployment rate is 3.9%, would one expect the rate of inflation to increase or decrease? Explain your answer.
- Now you face a wonderful decision. Imagine that you just won a lottery jackpot of $100,000. If you expect inflation to accelerate, should you buy that home you’ve been thinking of now? What would you decide if the rate of inflation is negative?
Homework Answers
The current unemployment rate in the United States is about 3.6 % and if the unemployment rate is 3.9 % it means that the unemployment rate is actually higher and according to Phillips curve unemployment and inflation inversely related which means that if the unemployment rate is actually increasing then the inflation would decrease.
If I got to win $100,000 lottery, I would actually say that it would be better to buy a house is the inflation is expected to increase in the future as the price of the house would increase with inflation and similarly the inflation rate is negative in the future is expected it means that it would be better if you buy the house later as you can get at a lower price.
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Think about this: If the current unemployment rate is 3.9%,
would one expect the rate of...
Now you face a wonderful decision. Imagine that you just won a lottery jackpot of $100,000....
Now you face a wonderful decision. Imagine that you just won a lottery jackpot of $100,000. If you expect inflation to accelerate, should you buy that home you’ve been thinking of now? What would you decide if the rate of inflation is negative?
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You want to invest this $100,000 in such a way to maximize your
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following alternatives:
You want to invest this $100,000 in such a way to maximize your
return from investment (in terms of dollars) one year from now,
while meeting the following guidelines:
• You must invest at least $20,000 in GF, and at most $30,000 in
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• The amount invested in CD should be at least as much as the
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• No more...
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