Pure Inflation Occurs When

question 27

Multiple Choice

Pure inflation occurs when

• A)nominal wages rise faster than all prices.
• B)all prices rise faster than nominal wages.
• C)all prices and nominal wages rise by the same percentage.
• D)the GDP deflator and Consumer Price Index rise by the same percentage.
• E) none of the above

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Definitions:

Present Value

The calculation of the current value of a sum of money or stream of cash flows that is to be received in the future, discounted at a specific rate.

Dollar Outlays

The total amount of money spent or invested in a particular project, purchase, or endeavor, often used in budgeting and financial planning.

Insurance

A contractual arrangement that provides financial protection or reimbursement to the insured against losses from specified risks or events.

Past Three Years

A term referring to the most recent three-year period for which records or data are available.