Inflation may impose little, if any, cost on the economy, if ________
A) laws against excessive price increases are enforced effectively
B) the government subsidizes menu costs
C) price increases are fully anticipated
D) the Fisher effect holds true
E) the rate of price increase is so slow that people do not feel compelled to alter their behavior
E
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If the opportunity cost of 1 wristwatch is 4 wall clocks in Japan and 2 wall clocks in Germany, it makes sense for Japan to produce wristwatches
Indicate whether the statement is true or false
In the first years of the new nation, American producers
(a) found it difficult to compete with the British in manufactured goods. (b) quickly developed agricultural technology that was more efficient than that in England. (c) did not use British manufacturing technology because England had forbidden the export of its technology. (d) began to specialize in the production of manufacturing goods, selling them to England and Europe.
The allocation of tax burden
A. is the total tax burden less the excess burden. B. is tax payments plus the excess burden. C. is tax shifting. D. is the tax incidence.
Government outlays include all of the following EXCEPT
A) dividend payments. B) spending on the military. C) electricity for the Capital Building. D) letterhead stationery.