(03.09 MC) An economics graduate student in the United States earns an 18,000 stipend per year. The U.S. sees significant inflation How might the student react? Move into a larger more spacious apartment Buy a new computer she had been putting off due to costs Increase the number of books in her syllabus for students to buy Ask for a cost-of-living increase to her stipend

The correct answer is: Ask for a cost-of-living increase to her stipend.<br /><br />Explanation: Inflation refers to the general increase in prices of goods and services over time. When there is significant inflation, the purchasing power of money decreases, meaning that the same amount of money can buy fewer goods and services than before. In this scenario, the economics graduate student is earning a fixed stipend of $18,000 per year. With significant inflation, the value of this stipend may not be sufficient to cover the increased costs of living. Therefore, the student might react by asking for a cost-of-living increase to her stipend to ensure that her income keeps up with the rising prices and maintains her standard of living.