Which of the following do not suffer the costs of inflation?
A) firms that have to devote more time and labor to raising prices
B) persons on fixed incomes
C) persons whose incomes rise more rapidly than inflation
D) an investor that has to pay higher taxes because of the inflation
C
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What is a monopoly? Can a firm be a monopoly if close substitutes for its product exists?
What will be an ideal response?
The purchase of foreign currency by a central bank will tend to cause ________
A) an appreciation of the domestic currency B) a depreciation of the domestic currency C) an increase in the value of foreign exchange, but no change in the value of the domestic currency D) a decrease in the value of foreign exchange, but no change in the value of the domestic currency
Taxes cause:
a. Market distortions b. A reduction in incentives to work c. A decrease in wealth creating transactions d. All of the above
Suppose that Jasper buys 35 quarts of bottled water each month when the price per quart is $1 . When the price declines to $0.60 per quart he buys 45 quarts each month. Find Jasper's price elasticity of demand for water?
a. -0.25 b. -0.50 c. -0.75 d. -1.00