Question

10.
The signing of long-term wage and price agreements and the relationship to inflation most likely raises the issue of
1.consumer price index (CPI) heteroscedasticity.
2.future price uncertainty.
3.price confusion problems.
4.deflationary tendencies.
5.money illusion.

12.
You have to pay costs for your business now, but you also have to enter into contracts to pay wages and supply costs in the future. If inflation occurs, the best term for the problem that arises in this case is
1.present value/future value uncertainty.
2.future price uncertainty.
3.price confusion.
4.menu costs.
5.deflationary price pressures.

Answer 1

Q10
Answer
Option 2
2.future price uncertainty
The inflation, in the long run, reduces the purchasing power of the dollar earnings because of the price levels increases. It creates uncertainty about future prices.
There is a chance of price change in the long term contracts, so there is a risk of it.

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Q12
Answer
Option 2
2.future price uncertainty

The inflation and future costs create a risk of change in price in the future, and the cost in current dollar changes and the purchasing power of it changes so the risk of future costs changes which is called future value uncertainty.