It is difficult to engage in long-term financial planning when inflation is:
A. accounted for through indexing.
B. low and stable.
C. predictable.
D. high and erratic.
Answer: D
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Keynesian economics:
a. affirms the classical economists' basic premise concerning competitive markets. b. believes that monopolies and unions tend to be permanent fixtures in our economy and the prices they create tend to be flexible, at least downwardly. c. emphasizes the possibility that an economy can never be in equilibrium at less than full employment. d. prefers to emphasize aggregate supply over aggregate demand. e. believes that unemployment results when aggregate demand is insufficient to reach a full-employment level of real GDP.
Taxes paid divided by total income is the
A. Marginal tax rate. B. Nominal tax rate. C. Horizontal tax rate. D. Effective tax rate.
The use of money makes us more efficient because:
A. we spend more time trading and more time producing. B. people can specialize in what they do well. C. money increases in value over time. D. with money we borrow less.
The real rate of interest is 3% and the anticipated rate of inflation is 2%. What is the nominal rate of interest?
A. -1% B. 0% C. 1% D. 5%