The costs of inflation that arise from trying to reduce cash holdings are known as
A) diminishing costs. B) menu costs. C) chain-index costs. D) shoe leather costs.
D
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Suppose your expenses for this term are as follows: tuition: $10,000, room and board: $6,000, books and other educational supplies: $1,000
Further, during the term, you can only work part-time and earn $8,000 instead of your full-time salary of $20,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? A) $11,000 B) $17,000 C) $23,000 D) $29,000
When there is positive inflation
A) the nominal interest rate is approximately equal to the real interest rate. B) the real interest rate is greater than the nominal interest rate. C) the nominal interest rate is greater than the real interest rate. D) the real interest rate is negative.
Suppose you manage a firm with two production plants. The marginal product of labor at plant 1 is MP1 = 1400 - L1 where L1 is the number of workers employed in plant 1. The marginal product of labor at plant 2 is MP2 = 2000 - L2 where L2 is the number of workers employed in plant 2. Given that you have 1,000 workers, what is the best allocation of workers between the two plants?
What will be an ideal response?
Nancy paid a tax of $0.50 on the last dollar she earned in 1999 . Nancy's marginal tax rate in 1999 was
a. more than 50 percent. b. exactly 50 percent. c. higher than her average tax rate. d. lower than her average tax rate.