Which of the Following Is a Cost of Anticipated Inflation

question 202

Multiple Choice

Which of the following is a cost of anticipated inflation?

• A)the real interest rate differs from what borrowers and lenders expected
• B)the risk associated with lending decreases
• C)the value of cash held by consumers falls
• D)economics classes become harder
• E)workers nominal income will rise

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Definitions:

Net Pay

Gross earnings, less deductions. Net pay, or take-home pay, is what the worker actually takes home.

Wages and Salaries Payable

Liabilities for wages and salaries that have been earned by employees but have not yet been paid.

Federal Income Taxes Payable

The amount of income tax that a company or individual owes to the federal government and has not yet paid.

Payroll Taxes Payable

Liabilities owed to tax authorities for employee taxes withheld and employer payroll taxes; to be paid within a specified period.