The "shoe-leather costs" of inflation are the costs from
A) the government taking a higher percentage of interest income.
B) higher prices for all goods, including necessities such as shoes.
C) confusion as people lose track of real costs and benefits.
D) higher taxes due to higher inflation.
E) time spent trying to spend money quickly.
E
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Refer to Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate was $2 per pound in the figure above, and equilibrium persisted at $3, then this was evidence of ________ and the IMF would allow a ________ in the
exchange rate. A) fundamental disequilibrium; revaluation B) fundamental disequilibrium; devaluation C) fundamental overvaluation; revaluation D) fundamental overvaluation; devaluation
A large government budget deficit ________ government saving and ________ national saving
A) raises, raises B) raises, lowers C) lowers, raises D) lowers, lowers
The short-run aggregate supply curve shows that a change in inflation will cause (a) change(s) in ________
A) output B) potential output C) expected inflation D) price shocks E) all of the above
Labor unions will raise the quantity of labor demanded
a. True b. False Indicate whether the statement is true or false