Inflation is impossible in a commodity money system
a. True
b. False
Indicate whether the statement is true or false
False
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If fixed cost at Q = 100 is $130, then
a. fixed cost at Q = 0 is $0 b. fixed cost at Q = 0 is less than $130 c. fixed cost at Q = 200 is $260 d. fixed cost at Q = 200 is $130 e. it is impossible to calculate fixed costs at any other quantity
If the central bank of a country increases the discount rate, a commercial bank would: a. experience a decrease in its net worth
b. hold a higher level of reserves. c. take more loans from the central bank. d. make more loans with its increased loan assets.
A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production). The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:
A. incorrect because all inputs are varied in the example. B. correct because some inputs are fixed in the long run. C. correct because marginal productivity must decrease in the short run. D. incorrect because economies of scale are present.
A reduction in the rate of inflation is called:
A. deflation. B. disinflation. C. hyperinflation. D. cost-push inflation.