What is the cost of transactions as it relates to the harm caused by inflation?
A. The cost associated with the time and effort of managing your spending
B. Production costs plus profit
C. The cost of the products whose prices are rising
D. The cost of the BLS market basket
Answer: A
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In the AD-AS framework, long-run equilibrium implies that ________
A) quantity demanded equals quantity supplied at a moderate level of equilibrium inflation B) quantity demanded equals quantity supplied at a point consistent with the short-run equilibrium level of inflation C) quantity demanded equals quantity supplied at a point consistent with the natural rate of unemployment D) all of the above E) none of the above
Under which one of the following contracts does an agent have the least incentive to behave opportunistically?
A) The agent pays a fixed fee to the principal for the right to all future payoffs. B) The agent works for the principal on an hourly basis. C) The agent receives a share of the profit. D) The agent works for the principal on a per unit basis.
If a monopoly firm is at a level of output where MC equals $10 and is increasing, MR equals $10, and average variable cost equals $9 . To maximize profits, the firm should: a. increase both output and price
b. increase output but decrease the price. c. decrease output and increase the price. d. not change either the output or the price.
If an economy is operating inside its production possibilities curve for tanks and bread:
a. scarcity does not exist
b. all resources are being used efficiently.
c. production of bread can only increase by sacrificing the production of tanks.
d. production of bread and tanks can both increase.