Speculation during periods of inflation can result in:
A. People buying resources for resale later rather than using the resources for current production.
B. A movement inside the production-possibilities curve.
C. People buying gold, silver, jewelry, etc., instead of capital for production.
D. People saving less of their disposable income.
E. All of the above.
Ans: E. All of the above.
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If the income elasticity for chocolate chip cookies is 1.84, then chocolate chip cookies are
A) a normal good and income inelastic. B) a normal good and income elastic. C) an inferior good and income inelastic. D) an inferior good and income elastic.
A network externality refers to a situation in which the usefulness of a product decreases with the number of consumers who use it
Indicate whether the statement is true or false
On January 1, 2010, a homeowner borrowed $5,000 for a term of six months to complete some home improvements, paying an annual interest rate of 8 percent. How much principal and interest will the homeowner pay back on July 1, 2010?
a. $2,500 b. $2,900 c. $5,200 d. $5,400
One shortcoming of real GDP as an indicator of society's social well-being is that it fails to take into account the:
A. non-market production. B. change in the price level. C. growth in productivity. D. increase in the quantity of goods.