The problems of inflation are caused primarily by:
a. greed on the part of sellers
b. uncertainty about inflation.
c. too much incentive to lend money.
d. greed on the part of union leaders.
e. governments' actions to reduce the effects of inflation.
b
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Suppose Kate's Great Crete (KGC) has annual variable costs of VC = 30Q + 0.0025Q2 and marginal costs of MC = 30 + 0.005Q, where Q is the number of cubic yards of concrete it produces per year. In addition, it has an avoidable fixed cost of $50,000 per year. KGC's demand function is Qd = 20,000 - 400P. What is KGC's average cost function?
A. AC = (50,000/Q) + 50 + 0.005Q B. AC = (20,000/Q) + 30 + 0.005Q C. AC = (50,000/Q) + 30 + 0.0025Q D. AC = 50,000 + 30Q + 0.0025Q2
In many countries, laws regarding firing and hiring mainly affect businesses with 50 or more workers. What effect has this had on the businesses?
a. More businesses have 49 or fewer workers. b. Fewer businesses have 49 or fewer workers. c. It has no effect on employment decisions. d. Businesses grow faster to lower the costs of these laws.
The "Applied Perspective" titled "Cross Elasticity in the Salmon Industry" suggests that the cross elasticity of demand between farm-raised salmon and wild salmon is
a. positive and fairly large so the two types of fish are close substitutes consumers b. positive but close to zero so the two types of fish are in different markets c. negative because consumers like to serve both types as complementary goods d. high so that a price decrease leads to a total revenue increase e. low so that a price decrease leads to a total revenue decrease
For a macroeconomist, the case for aggregation is based on two principles—(1) the composition of demand and supply may not matter for some purposes and (2)
A. during fluctuations markets normally move together. B. individual markets allocate resources efficiently. C. inflation, unemployment, and growth never go together. D. individual markets distribute income efficiently.