The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation. II. the diversion of productive resources to forecasting inflation
A) I only
B) II only
C) both I and II
D) neither I nor II
C
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Which of the following is not an obstacle to development?
A. Overpopulation B. Excessive investment C. Political instability D. Corruption
The interest rate:
A. is expressed as a percentage per dollar borrowed and per unit of time. B. tells us how much less money is worth today than in the future. C. exists only because lending is risky. D. All of these statements are true.
What are the marginal propensity to consume and level of autonomous consumption spending for a consumption function of the following form: C = 1,200 + 0.5DI?
a. The marginal propensity to consume is 0.5; autonomous consumption spending is $0.50. b. The marginal propensity to consume is 0.5; autonomous consumption spending is $1,200. c. The marginal propensity to consume is 1,200; autonomous consumption spending is $0.50. d. The marginal propensity to consume is 1,200; autonomous consumption spending is $600. e. There is insufficient information to answer this.
A monopolist is currently hiring 5,000 units of labor. At this level, the marginal revenue of output is $10, the (fixed) wage rate is $300, and the marginal product of labor is 50. In order to maximize profit, the firm should
A. hire more labor because the next unit of labor increases profit by $500. B. hire more labor because the next unit of labor increases profit by $200. C. hire less labor because the last unit of labor added more to total cost ($300) than to total revenue ($10). D. keep the level of employment the same because the firm is earning a profit of $100,000.