An Individual Would Suffer Lower Losses from an Unexpectedly Higher

question 11

Multiple Choice

An individual would suffer lower losses from an unexpectedly higher inflation rate if

• A)she held much currency and owned few bonds.
• B)she held much currency and owned many bonds.
• C)she held little currency and owned few bonds.
• D)she held little currency and owned many bonds.

---

Definitions:

Phillips Curve

An economic theory that proposes an inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Inflation Rate

The rate, expressed as a percentage, at which the overall cost of goods and services increases, leading to a decrease in purchasing power.

Unemployment

The situation in which individuals who are capable of working and willing to work are not able to find employment.

Money Supply

The comprehensive total of money assets accessible in an economy at a particular instance.