During an inflationary period, a household with savings of $100,000
A) loses because inflation increases the real tax on the interest paid.
B) gains because the inflation gives savers more money and so more purchasing power.
C) loses because the inflation increases the after-tax real interest rate.
D) gains because inflation increases the value of their savings.
E) neither gains nor loses because inflation does not affect savers.
A
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Fiscal policy is typically
A. difficult to implement quickly. B. extremely flexible, because most government spending is discretionary. C. hard to implement despite the fact that there are not usually implementation problems. D. extremely flexible provided policy lags are short.
Profit-maximizing firms will expand their employment of each variable resource until
a. the Marginal Revenue Product (MRP) of the resource is just equal to the price of the resource. b. other firms realize they can't compete. c. the MRP of the resource is below the cost of the resource. d. the MRP of the resource is above the cost of the resource.
Production possibilities curve
What will be an ideal response?
In order to sell one additional unit of output, a profit-maximizing monopolist must:
A.) Increase the size of its factory. B.) Reduce marginal cost. C.) Increase marginal revenue. D.) Reduce the price of all units sold.