Explain why economists care about inflation
What will be an ideal response?
Inflation will cause relative prices to change. It will also cause changes in the distribution of income. Inflation will lead to other distortions such as tax distortions and uncertainty.
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Natural monopolies are of theoretical, but not practical interest.
Answer the following statement true (T) or false (F)
A country has private saving of $500 billion, public saving of -$100 billion, domestic investment of $150 billion, and net capital outflow of $250 billion. What is its supply of loanable funds?
a. $650 billion b. $600 billion c. $400 billion d. $350 billion
The existence of unemployment can be illustrated on a production possibilities curve by a(n)
A. point below or inside the surface of the curve. B. inward shift of the curve. C. movement along the curve. D. outward shift of the curve.
When an economy is on the balanced growth path, the growth rate of real GDP per capita is determined by the growth rate of
A) convergence. B) capital accumulation. C) total factor productivity. D) the labor force.