Describe the major costs of inflation, being sure to distinguish between anticipated and unanticipated inflation
What will be an ideal response?
Costs of anticipated inflation include an erosion of the value of currency, which leads to shoe-leather costs, and the costs of changing prices. Costs of unanticipated inflation arise because unanticipated inflation transfers wealth between people and because it disturbs the role of prices as signals in the economy.
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According to the above table, if real Gross Domestic Product (GDP) equals $30,000, what is the average propensity to consume?
A) 0.75 B) 0.67 C) 0.8 D) 0.87
Refer to the scenario above. This is an example of a(n) ________
A) extensive-form game B) simultaneous-move game C) zero-sum game D) mixed strategy game
Assume that movement from point A to point B represents a 15 percent change in the price of goods and services. What would be the corresponding change in the price of inputs?
a. no change
b. 15 percent increase
c. 15 percent decrease
d. 100 percent increase
Ray just got a raise, and decided to splurge on a fancy dinner to celebrate. The change to Ray's demand for fancy dinners could be measured by the:
A. price elasticity of demand. B. income elasticity of demand. C. price elasticity of supply. D. cross-price elasticity.