Which of the following is not a likely consequence of inflation?
a) Firms incur the “menu costs” of changing advertisements
b) Some taxpayers are pushed into higher tax brackets
c) The value of currency is reduced
d) Banks reduce nominal interest rates to reflect expected inflation
e) Price signals sent by consumers to firms are distorted
d) Banks reduce nominal interest rates to reflect expected inflation
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In the long run, the real interest rate is determined by
A) the nominal interest rate. B) saving supply and investment demand. C) the multiplier effect. D) the expected inflation rate. E) Fed actions.
If you have private information that you are a safer driver than your record indicates, you are likely to buy an insurance policy with
A) a higher than average deductible. B) a positive but lower than average deductible. C) an average deductible. D) no deductible.
Figure 11-9
In Figure 11-9, at the profit-maximizing monopolist output, this firm receives how much profit per unit?
A. $1 B. $2 C. $3 D. $11
A new country has been established on the moon and created a currency called cheesybits. Which of the following does not involve a foreign exchange transaction?
A. Luna lives on the moon and wants to travel to visit relatives in Japan. B. Moonrock corporation needs new mining equipment that it buys from a manufacturer in Russia. C. Moonbeam Incorporated, the largest company on the moon, sells building products for houses on the moon. D. Han is visiting the moon and wants to eat at his favorite restaurant, the Moonglow Bar and Grill.