lesson 11 - cost of inflation Flashcards
1
Q
unanticipated inflation
A
when the price increases @ a faster pace than expected
2
Q
unanticipated disinflation
A
when the price increases @ a slower pace than expected
3
Q
unanticipated deflation
A
when price level decreases when you expected it to increase
4
Q
wealth redistribution
A
when real value of wealth is transferred from one agent to another when inflation is higher than expected, wealth is transferred as it is not the same value
5
Q
lender
A
an agent (bank) who makes money avalible to another with an agreement
6
Q
borrower
A
agent that has received money from another agent
7
Q
saver
A
agent not spending income –> interest earning accountb
8
Q
bond
A
an asset promised to pay a fixed amount at some point in the future
