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MACRO ECONOMICS QUESTIONS
Macro Economics Questions
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MACRO ECONOMICS QUESTIONS
Case study 1
Question 1.1
Inflation taxes not only current income and expenditures but also reduces future values.
The amount by which inflation reduces wealth is called depreciation. This lowers the value of
cash and assets held in cash-like instruments such as savings accounts and bonds that pay fixed
(Fields, 2015). Holders of money will be hurt by an increase in inflation because their purchasing
power will decline. Inflation can be thought of as a "tax" on money holdings because as prices
for goods rise, people have ...