Which of the following might encourage the government to let inflation rates rise?
A. A higher inflation rate reduces the budget deficit.
B. The government has more work to do when there is an AD excess.
C. Social Security and retirement benefits are indexed.
D. The government has to make higher interest payments with higher inflation rates.
Answer: A
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Acquiring a firm that sells a substitute good will
a. Make the demand curve more inelastic b. Make the demand curve more elastic c. Make MR>MC d. Will have no effect on the demand curve
Vouchers allow students to
A. get free lunches at public schools. B. go to public schools at reduced rates. C. receive discounts on school supplies like pens and paper. D. all of these. E. none of these answer options are correct.
Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. WithFilterWithoutFilterGains to Erie$200$400Fisherman$180$50Bird Watchers$130$25When Erie Textiles operates with a filter, the total gain (in thousands of dollars) by all three parties is ________.
A. $600 B. $475 C. $510 D. $985
Suppose the equilibrium wage rate in the labor market is $10 and the demand for labor increases. If wages are sticky, there will be a
A. shortage of labor and the wage rate increases. B. surplus of labor and the wage rate increases. C. shortage of labor and the wage rate stays the same. D. surplus of labor and the wage rate declines.