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Chapter 9: Q 16. (page 243)

What has been a typical range of inflation in the

U.S. economy in the last decade or so?

Short Answer

Expert verified

Between 2 to 4 percent.

Step by step solution

01

Step 1. Definition

Inflation is the rate at which prices increase over a period of time. Inflation is a broad measure, such as the increase in prices or the increase in the cost of living in a country.

02

Step 2. 

Every country that keeps a check on its inflation has fixed a rate which is under various economists and statisticians. In the US this is generally 2% to 4%.

In 2009, the inflation rate was 2.7%, which increased to 3% in 2011. In the year 2016, the rate fell to 2.1%.

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Most popular questions from this chapter

Who in an economy is the big winner from inflation?

Name several forms of indexing in the private and

public sector.

Why is the GDP deflator not an accurate measure of inflation as it impacts a household?

Imagine that the government statisticians who calculate the inflation rate have been updating the basic basket of goods once every 10 years, but now they decide to update it every five years. How will this change affect the amount of substitution bias and quality/new goods bias?

If inflation rises unexpectedly by 5%, indicate for each of the following whether the economic actor is helped, hurt, or unaffected:

a. A union member with a COLA wage contract

b. Someone with a large stash of cash in a safe deposit box.

c. A bank lending money at a fixed rate of interest.

d. A person who is not due to receive a pay raise for another 11months.
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