One concern of those who oppose the central bank targeting inflation at zero is that reducing inflation is costly. What is the cost of reducing the inflation rate?
A temporary recession.
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At its current level of quantity, a perfectly competitive firm's marginal revenue is $3.25, its short-run marginal cost is $3.25 and its long-run marginal cost is $3.25. Which of the following statements is true?
A) The firm is maximizing both its short-run and long-run profit. B) The firm is maximizing its long-run profit, but not its short-run profit. C) The firm is not maximizing its short-run or long-run profit. D) The firm is maximizing its short-run profit, but not its long-run profit.
The market process is dynamic
Indicate whether the statement is true or false
If there is currently an inflationary gap: a. The price level will tend to rise. b. Real output will tend to rise
c. Both a. and b. will occur. d. None of the above will occur.
If the interest rate is 5 percent, $100 received at the end of seven years is worth how much today?
A. 100 B. 100/(0.05)7 C. 100/(1 + 5)7 D. 100/(1 + 0.05)7