As a Result of Unanticipated Inflation

question 73

Multiple Choice

As a result of unanticipated inflation,

• A) government will be made worse off due to increases in expenditures.
• B) government will be made better off due to increases in revenues.
• C) individuals living on fixed incomes will be made better off.
• D) debtors will be made worse off due to increases in the interest rate.

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Definitions:

Worn

Showing signs of use or aging, typically in the context of clothing, goods, or machinery having diminished quality or condition over time.

Marginal Product

The additional output resulting from the use of one more unit of a variable input, while holding other inputs constant.

Variable Cost

Variable cost is the type of cost that varies with the level of output or production, such as materials and labor costs.

Marginal Product

The additional output produced by using one more unit of a input, holding all other inputs constant, used in the analysis of production efficiency.