Which of the Following Is FALSE, If an Increase in the Inflation

question 16

Multiple Choice

Which of the following is FALSE, if an increase in the inflation rate cannot be perfectly anticipated?

• A)there will be a redistribution of income and wealth
• B)debtors will benefit while creditors will lose
• C)the holder of an indexed government bond will lose
• D)the government will gain real tax revenue
• E)the real value of government debt will decline

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Definitions:

Analogy

A comparison between two things, typically for the purpose of explanation or clarification.

Availability Heuristic

The availability heuristic is a cognitive bias that involves making judgments about the likelihood of events based on how easily examples come to mind.

Functional Fixedness

A tendency to think of things based on their usual functions, which may make it harder to solve a problem.

Framing

The way information is presented or worded, which can significantly affect decisions and judgments.