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Please answer the following questions. Thank you in advance. The home where I grew up was purchased by my father for $3,200 in the year
Please answer the following questions. Thank you in advance.
- The home where I grew up was purchased by my father for $3,200 in the year 1943. As of the year 2012, its market value was $850,000.
- Using the concepts of purchasing power, inflation, and price indexes how would you explain this tremendous increase in value?
- Are there any other possible outside factors besides the above which might also help explain the increase?
- Explain why you think that borrowers of money and lenders of money view inflation differently.
- How do borrowers normally react to high inflation rates?
- How do lenders normally react to high inflation rates?
- Discuss whether you feel that there are some positive (good) aspects to high inflation. If you don't feel that there are any, explain why.
- If you were an employer would you favor a law which forces you to increase your employee's wages each year by the same % as the inflation rate? Explain for us.
- The Real wage rate is expressed in 1980 dollars. In 2015 this was almost $8 per hour while the nominal wage rate was close to $20 per hour. Using these two graph lines, would you say that the standard of living for most Americans has gotten better? Explain your response and give an example supporting it.
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