Macroeconomic stability has been a high priority for the economic policies of the high-growth Asian economies
Indicate whether the statement is true or false
TRUE
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During an inflationary period, a household with savings of $100,000
A) loses because inflation increases the real tax on the interest paid. B) gains because the inflation gives savers more money and so more purchasing power. C) loses because the inflation increases the after-tax real interest rate. D) gains because inflation increases the value of their savings. E) neither gains nor loses because inflation does not affect savers.
Refer to the scenario above. What will be the future value of the deposit after 1 year?
A) $8,420 B) $8,480 C) $8,640 D) $8,820
Which of the following situations depicts diseconomies of scale?
A) The average total cost of a firm increases from $50 to $55 when it increases its production from 10 units to 20 units. B) The average total cost of a firm decreases from $50 to $40 when it increases its production from 10 units to 20 units. C) The average total cost of a firm remains at $50 when it increases its production from 10 units to 20 units. D) The average total cost of a firm remains at $50 when it decreases its production from 20 units to 10 units.
Another term for the real-balance effect is
A) the substitution effect. B) the wealth effect. C) the indirect effect. D) the interest rate effect.