What is the major cost associated with fighting ongoing inflation?
a. Higher interest rates.
b. Lost potential output.
c. Lower price level.
d. Higher price level.
e. None of the above.
B
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Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 40 units of clothing but no food. Suppose each has the utility function U = F ? C. The price of clothing is always $1
What is the competitive equilibrium price for food? A) $5 B) $4 C) $3 D) $2
If resource prices are fixed and the product selling price rises, then
a. profits will decrease. b. profits will increase. c. profits will remain constant. d. both profits and output will decrease.
The value of the marginal product of labor is calculated by multiplying the
a. price of output by the quantity of labor. b. price of output by the marginal product of labor. c. wage by the quantity of labor. d. wage by the marginal product of labor.
Over the last four decades the U.S. had
A. only balanced budgets. B. only surpluses. C. only deficits. D. both deficits and surpluses.