When inflation rises, people tend to go to the bank
a. more often, giving rise to menu costs.
b. more often, giving rise to shoeleather costs.
c. less often, giving rise to redistribution costs.
d. less often, thereby lessening the severity of the inflation tax.
b
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In the Keynesian model, an increase in government spending increases
A) the money supply by an equal amount. B) the money supply by a multiple amount. C) aggregate demand by an equal amount. D) aggregate demand by a multiple amount.
Tuition and fees for four year colleges in the United States have risen over five percent per year in the recent past. One cause for the increase in price has been an increase in demand for college education. In the standard model, what could be a possible explanation for the increase in the demand for college education?
A. More colleges have been established B. The cost of two-year colleges has declined over the same period C. Income in the United States has risen D. The price of all other goods in the economy has risen 3 percent over the same period
The slope of an iso-revenue line is determined by
A) The ratio of the product to the level of output. B) The ratio of the price of the two products. C) The ratio of output to the price of the product. D) None of the above
Consider two lottery winners, Tino who is 65 years old and Sasha who is 32 years old. Which of these two would be expected to have the larger income effect, all else equal?
A) Sasha B) Tino C) Both would have no income effect. D) Both would have equal income effects.