Inflation premium
Describe the term Inflation premium and how it is the prospect of future inflation?
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Inflation premium: It is the prospect of future inflation, very strongly affects the shape of the term structure. Investors thinking regarding loaning money for different lengths of time recognize that future inflation erodes the value of dollars which will be returned. As an outcome, investors demand compensation for such loss in the form of maximum nominal rates. This extra compensation is termed as inflation premium.
Since philosophers are hardworking and intelligent individuals who should acquire substantial human capital and advanced degrees to work like philosophers, in that case the shaded area B represents: (1) pure profit. (2) consumer surplus. (3) interest
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In addition to price, what are the other determinants that consumers want to buy?
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The substitution effect is negative since people react to a price raise by: (i) Reducing purchases of good. (ii) Generating more of good. (iii) Purchasing some substitute goods. (iv) Working less to sustain the existing purchasing patterns. Discover Q & A Leading Solution Library Avail More Than 1427703 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1932638 Asked 3,689 Active Tutors 1427703 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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