Asset price inflation can be a problem because it:
A. gives people the illusion that their real wealth has decreased more than it really has.
B. gives people the illusion that their real wealth has increased more than it really has.
C. typically increases at the same rate as goods price inflation.
D. makes people switch their resources from risky investments to conservative investments.
Answer: B
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"Kids eat free" in a fast food restaurant is an example of
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) no price discrimination.
Which of the following is not a valid explanation for the high unemployment rate among African American teens?
A. discrimination B. concentration in inner cities where job opportunities for less-skilled workers are inadequate C. lack of desire to work D. minimum wage law
In behavioral economics, salience is best exemplified by
A) consumers responding differently when posted prices increase rather than when prices increase because of sales tax increases. B) consumers responding the same regardless of how prices change. C) the end of a controlled experiment. D) consumers responding differently when income increases permanently rather than temporarily.
Refer to the figure above. When the monopolist is free to set the price, ________
A) it makes a profit of $150 B) it makes a loss of $150 C) it makes a profit of $300 D) it makes a loss of $300