Describe three costs of inflation
There are several costs of inflation. Shoeleather costs are the resources people spend to economize on their money holdings when inflation is high. Menu costs are the costs created by changing price tags and prices in menus and catalogs. Increased relative price variability from higher inflation distorts signals provided by relative price changes and so misallocates resources. Distortions created by inflation in the tax code discourage saving and so may lower the standard of living. Unexpected inflation arbitrarily redistributes wealth. In general a changing value of the unit of account creates inconvenience.
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Which point in the figure above is an attainable combination that would have unemployed resources?
A) point A B) point B C) point C D) point D E) point A and point B
A horizontal merger is a merger between firms
A) earning roughly the same amount of profit. B) producing roughly the same products. C) regularly doing business of any sort with each other. D) standing in a supplier-purchaser relationship. E) that were previously independent.
Just before class, Jim tells Stuart, "Stuart, you shouldn't skip class today because you have paid tuition to enroll in the class." Stuart ignores Jim's advice, and instead makes the decision of whether to attend based on the importance to his grade that he feels he'd be missing that day in class relative to his value of the extra time he could have to finish the video game he is playing. To an
economist, Stuart is: a. using marginal analysis. b. ignoring the total value of attending class. c. ignoring the concept of opportunity cost. d. irresponsible.
If country A had four times the initial level of real GDP per capita of Country B and it was growing at 1.4 percent a year, while real GDP was growing at 2.3 percent in country B, how long would it take before the two countries had the same level of real GDP per capita?