One benefit of low inflation is that it _____ the variability of relative price changes. Therefore, resources are _____ likely to be better allocated
Fill in the blank(s) with correct word
reduces, more
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If the demand and supply curves for a commodity both shift to the left by the same amount, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
A) a higher price quantity. B) the same price and a higher quantity. C) the same price and a lower quantity. D) a lower price and a higher quantity.
Recall the Application about the break-even price for growing switchgrass, a perennial grass that is native to the U.S. plains states and is used to create biofuel, to answer the following question(s).Recall the Application. If the minimum average variable cost for switchgrass farmers is $40 per ton and the current price is $35 per ton, in the long run the switchgrass farmer will:
A. exit the industry. B. operate and lose money. C. make a positive economic profit. D. make a zero economic profit.
Which of the following is NOT a function of the Federal Reserve System?
A. The Fed supplies the economy with fiduciary currency. B. The Fed holds reserves of depository institutions. C. The Fed determines government spending and taxation policies. D. The Fed acts as fiscal agent for the United States Department of the Treasury.
In well functioning markets, the degree of product variety reflects which of the following?
A. gains from coordination B. similar preferences in consumers' tastes C. cost diseconomies from standardization D. gains from network externalities