Inflation reduces economic efficiency because it does each of the following except:
A. Obscure information transmitted by prices.
B. Distort incentives through interaction with the tax laws.
C. Change relative prices.
D. Induce people to minimize cash holdings.
Answer: C
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To the extent that the value of money is less predictable, it becomes
A) more acceptable as a store of value. B) less acceptable as a medium of exchange. C) more acceptable as a standard of deferred payment. D) more acceptable as a unit of account.
Economic reasoning is based on the premise that:
a. all decisions or actions are costless. b. only non-economic decisions or actions have a cost associated with them. c. only economic decisions or actions have a cost associated with them. d. all decisions and actions have a cost associated with them.
A firm will never operate at a loss
Indicate whether the statement is true or false
A compensating differential refers to a difference in wages that arises from nonmonetary characteristics
a. True b. False Indicate whether the statement is true or false