CHAPTER 5 Inflation Who Wins and Who Loses

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CHAPTER 5 Inflation: Who Wins, and Who Loses? Copyright© 2008 South-Western, a part of

CHAPTER 5 Inflation: Who Wins, and Who Loses? Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -1 Effects of Inflation on the Purchasing Power of a $100, 000

Exhibit 5 -1 Effects of Inflation on the Purchasing Power of a $100, 000 Salary Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -2 U. S. Consumer Price Index: January 1960–July 2006 Source: U. S.

Exhibit 5 -2 U. S. Consumer Price Index: January 1960–July 2006 Source: U. S. Department of Labor: Bureau of Labor Statistics, http: //research. stlouisfed. org/fred 2/series/ CPIAUCNS/downloaddata (accessed September 7, 2006). Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -3 Cost of a U. S. University Education for One Year at

Exhibit 5 -3 Cost of a U. S. University Education for One Year at Various Inflation Rates Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -4 The Circular Flow Diagram Copyright© 2008 South-Western, a part of Cengage

Exhibit 5 -4 The Circular Flow Diagram Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -5 Relationship among Nominal Interest Rate, Real Interest Rate, and Expected Inflation

Exhibit 5 -5 Relationship among Nominal Interest Rate, Real Interest Rate, and Expected Inflation Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -6 Effects of Inflation When Expected Inflation = Actual Inflation Copyright© 2008

Exhibit 5 -6 Effects of Inflation When Expected Inflation = Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -7 Effects of Inflation When Expected Inflation > Actual Inflation Copyright© 2008

Exhibit 5 -7 Effects of Inflation When Expected Inflation > Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -8 Effects of Inflation when Expected Inflation < Actual Inflation Copyright© 2008

Exhibit 5 -8 Effects of Inflation when Expected Inflation < Actual Inflation Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -9 When are Lenders and Borrowers Hurt and Helped by Inflation? Copyright©

Exhibit 5 -9 When are Lenders and Borrowers Hurt and Helped by Inflation? Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -10 Adaptive Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning.

Exhibit 5 -10 Adaptive Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -11 Rational Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning.

Exhibit 5 -11 Rational Expectations Theory Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Exhibit 5 -12 When are Laborers and Businesses Hurt and Helped by Inflation? Copyright©

Exhibit 5 -12 When are Laborers and Businesses Hurt and Helped by Inflation? Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

Economic Information for Switzerland, 2001– 2005 Copyright© 2008 South-Western, a part of Cengage Learning.

Economic Information for Switzerland, 2001– 2005 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved.

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