Firms that are price searchers
a. will eventually find and charge the highest price at which consumers will purchase any units.
b. face inelastic demand curves for their products.
c. do not confront rival sellers like price takers do.
d. face a downward-sloping demand curve.
D
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Under a fixed exchange rate system, if the inflation rate in the United States is 0 percent a year and the inflation rate in Australia is 5 percent a year, then the U.S. real exchange rate will
A) may increase or decrease. B) decrease 5 percent a year. C) remain constant. D) increase 5 percent a year.
The income effect of a price change refers to the impact of a change in
A) income on the price of a good. B) the quantity demanded when income changes. C) the price of a good on a consumer's purchasing power. D) demand when income changes.
According to the graph above, the expansion that began in December 1914 had a duration of ________
A) 51 months B) 4 years C) 3 years D) 44 months E) 20 months
Which costs of inflation could the government reduce without reducing inflation?
a. shoeleather and menu costs b. menu costs and relative price variability c. unintended changes in tax liabilities and arbitrary redistributions of wealth d. none of the above is correct.