Euro-optimists believe the success of the euro to be the result of all of the following, EXCEPT:
A) more trade leads to more success for the euro.
B) more countries are lining up to join the euro.
C) more capital and labor mobility will take place under the euro.
D) more scope for asymmetric shocks, rather than symmetric shocks.
Ans: D) more scope for asymmetric shocks, rather than symmetric shocks.
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One cost of a perfectly anticipated inflation is that it
A) transfers wealth from lenders to borrowers. B) transfers wealth from borrowers to lenders. C) increases menu costs. D) damages the role of prices as signals in the economy.
If the expected value of the U.S. dollar rises, one would expect ________
A) a decrease in the demand for dollars B) an increase in the demand for the dollar C) an increase in U.S. income D) an increase in federal income tax rates
Supply-side economists argue that taxing of nominal gains and interest earnings during inflationary periods
a. results in an increased effective tax rate on real returns but will not retard saving. b. will retard saving but will not increase the effective tax rate on real returns. c. will increase the effective tax rate on real returns and will retard saving. d. None of the above
If the price of airline tickets falls, what will happen to the demand curve for flight attendants?
a. It will shift to the right. b. It will shift to the left. c. The direction of the shift is ambiguous. d. It will remain unchanged.