Monetary Policy - Inflation - Costs
Worksheet - Inflation - who is hit by it?
The purpose of this worksheet is to look at the principal costs of inflation. It aims to establish what the costs are and which groups in society are hit hardest by inflation.
1. Why is it important to consider whether inflation is 'anticipated' or 'unanticipated'?
(4 Marks)
2. What are the main costs of anticipated inflation? Give a brief explanation of each.
a)
Explanation
b)
Explanation
c)
Explanation
(9 Marks)
3. What are the main costs of unanticipated inflation? Give a brief explanation of each.
a)
Explanation
b)
Explanation
c)
Explanation
d)
Explanation
(12 Marks)
4. Which groups in society are likely to be hardest hit by a moderate level of inflation? Give reasons for your answer.
a)
Reasons
b)
Reasons
c)
Reasons
(9 Marks)
5. Not everybody loses from inflation - some may gain. Who do you think could gain from inflation? Give reasons for your answer.
Reasons
(3 Marks)
6. Discuss whether the costs of inflation could ever outweigh the benefits.
(13 Marks)
Total Marks = 50
