"When economies experience high levels of inflation, the ability of money to act as a unit of account diminishes, and it becomes harder to make decisions." Which of the following costs of inflation does this statement describe?
a. Menu costs
b. Shoe-leather costs
c. Unit-of-account costs
d. Time costs
c
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Normative economic statements
a. can’t be verified. b. deal with “what is”. c. consider the effect one variable has on another variable . d. None of these.
Which combination of government policies would be most likely increase labor demand?
a. Increasing subsidies to education and increasing subsidies to businesses for hiring new employees b. Reducing income tax rates and cutting transfer payments to the needy c. Raising income tax rates and cutting transfer payments to the needy d. Reducing subsidies to education and increasing subsidies to businesses for hiring new employees e. Increasing subsidies to education and reducing subsidies to businesses for hiring new employees.
Refer to the graph shown. Within which section(s) of the production function is marginal product decreasing?
A. A B. B C. A and B D. B and C
You value your favorite shirt at $100. Someone else values it at $80, and that person is willing to pay you $80 for your shirt. Would selling your shirt to this person for $80 be Pareto efficient?
A. No, the person paid you $80 for the shirt so his net benefit was $0, while your net benefit was -$20. For this change to be Pareto efficient, each of you should have the same net benefit. B. Yes, because any time you engage in trade, the result must be Pareto efficient. C. Yes, because even though you lose from the trade and he gains, there is the potential for him to compensate you for your loss. D. No, because both of you are not better off as a result of the trade.