Inflation
a. hurts society by imposing additional opportunity costs
b. is generally harmful, but has the benefit of reducing opportunity costs
c. makes it easier for us to comparison shop
d. benefits society by causing people to make use of resources that would have otherwise gone to waste
e. benefits society because by making people better consumers, they start to buy only those consumer goods they really need
A
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The concept of "the invisible hand" suggests that to attain efficiency, the government should
A) guide economic activity. B) set prices. C) leave prices and output decisions to the competitive market. D) regulate all production decisions, but not price decisions. E) make sure that a command system is used to allocate resources.
Monetarists argue that government deficits financed by monetary expansion cause(s)
A) velocity to increase. B) aggregate demand to increase. C) aggregate demand to decrease. D) no change in aggregate demand or aggregate supply.
As the level of real GDP increases, the short-run aggregate supply curve:
a. shifts to the right. b. shifts to the left. c. becomes flatter. d. becomes steeper. e. becomes horizontal to the real GDP axis.
Nicole's income elasticity of demand for hats is 1.5 . All else equal, this means that if her income increases by 20 percent, she will buy
a. 150 percent more hats. b. 50 percent more hats. c. 30 percent more hats. d. 20 percent more hats.