Making more frequent, but smaller cash withdrawals from banks ________ the inflation losses from holding cash and ________ the shoe leather costs of inflation.
A. reduces; increases
B. reduces; has no impact on
C. increases; reduces
D. increases; increases
Answer: A
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By human capital, economists mean
A) machines that replace humans. B) machines engineered to avoid operator injury. C) the accumulated skill and knowledge of humans. D) humans who perform repetitive tasks.
Suppose consumer confidence improves and as a result, consumer spending increases by $50 billion dollars. Assume households spend $0.80 of each extra dollar of income and save the remaining $0.20
Other things equal, calculate by how much spending will increase during: a. the first round through the circular flow. b. the second round through the circular flow. c. the third round through the circular flow. d. the fourth round through the circular flow.
Which of the following statements about price discrimination is correct?
a. Price discrimination is always more profitable than charging a single price. b. A price discriminator would want to charge the highest price to those customers with the most elastic demand for his product. c. To be successful, a price discriminator must assure that items can be resold between high- and low-price groups. d. To maximize profit, a price discriminator distinguishes groups with different demands and charges higher prices to those with the more inelastic demand.
If banks are willing to make loans and consumers and businesses are willing to borrow money, this constrains the money supply.
Answer the following statement true (T) or false (F)