Because the inflation rate is so high Wanda refuses to carry cash. Even though it is a bother, she now goes to the ATM twice as often to get the cash she needs. Wanda's actions are an example of the
A) tax distorting costs of inflation.
B) uncertainty costs of inflation.
C) tax costs of inflation.
D) shoe-leather costs of inflation.
E) confusion costs of inflation.
D
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Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Z on the investment demand curve. Given these conditions, what policy should the monetary authorities pursue to achieve a noninflationary, full-employment level of real GDP?
A. Sell government securities in the open market. B. Decrease the reserve requirement. C. Decrease the discount rate. D. Make no change in monetary policy.
According to economic theory, social interactions are the result of
A) calculated choices by individuals B) chance and the laws of probability. C) genetic and environmental factors. D) random occurrences.
Consumption spending is $16 million, planned investment spending is $4 million, unplanned investment spending is $2 million, government purchases are $6 million, and net export spending is $1 million. What is aggregate expenditure?
A) $22 million B) $26 million C) $27 million D) $29 million
Fiat money
A) serves well as a medium of exchange, but not as a store of value. B) has no or very little value except as money. C) is rarely used in modern economies. D) functions well only if can be redeemed for gold or other precious metals.