If the Inflation Rate Is 4 Percent a Year and Everyone

question 184

True/False

If the inflation rate is 4 percent a year and everyone expected 2 percent a year,then the potential level of real GDP will increase.

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Definitions:

Newly Manufactured

Items or products that have been recently produced, as opposed to being second-hand or reused.

Personal Income

The total income received by individuals from all sources including wages, salaries, dividends, and any other income before taxes.

Disposable Personal Income

The sum of money remaining for savings and expenditures in households once income taxes are deducted.

National Income

The total amount of money earned by a nation's people and businesses, including wages, rent, interest, and profits.