In dealing with their financing needs, developing countries have found that the inflation tax provides:
A. neither a short-run nor a long-run solution.
B. a short-run solution but not a long-run solution.
C. a long-run solution but not a short-run solution.
D. both a short-run and a long-run solution.
Answer: B
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If a firm shuts down in the short run, then
a. total revenue and total cost drop to zero b. total revenue drops to zero, but the firm must still pay its fixed cost c. total revenue drops to zero, but the firm must still pay some variable cost d. total cost drops to zero, but the firm still earns some residual revenues e. neither total revenue nor total cost drops to zero
An increase in personal saving as a percentage of disposable income contributes to capital deepening
Indicate whether the statement is true or false
At which interest rate is the present value of $80.25 one year from today equal to $75 today?
a. 4 percent b. 5 percent c. 6 percent d. 7 percent
Suppose a consumer has determined that her reservation price, R, is $75. The expected benefit of an additional search at this reservation price is $25. Based on this information we can conclude that:
A. this consumer will accept any price below $75. B. search costs are $25 per search. C. search costs are $25 per search, and this consumer will accept any price below $75. D. this consumer will reject any price above $25.