Suppose an economy experiences an increase in inflation. Explain the possible macroeconomic benefits of this increase in inflation
What will be an ideal response?
Answers should include discussions of: seignorage, the option of a negative real interest rate, and money illusion.
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________ refers to funds available for immediate payment
A) Term deposits B) Velocity C) Mutual funds D) Liquidity
Andrew's utility of wealth schedule is depicted in the above table. Andrew is offered a job as a cook which pays $10,000. He is also offered a job as a server which will pay $5,000 if tips are poor and $15,000 if tips are good
There is a 50 percent chance that tips will be poor and a 50 percent chance that tips will be good. Given the nature of Andrew's job offers and his utility of wealth schedule, Andrew will A) accept the offer to work as a server. B) accept the offer to work as a cook. C) be indifferent between working as a cook or a server. D) be unable to reach a decision about which offer to accept.
The increase in the trade deficit in the 1980's reflected a decrease in national saving that is associated with an increase in the government budget deficit
a. True b. False Indicate whether the statement is true or false
The demand for a product is likely to be more elastic
A. the shorter the time the consumer has to adjust to price changes. B. the lower the price of the good. C. the fewer the number of good substitutes. D. the less the essential nature of the good.