Imagine you own an ice cream store in New York City. Unpredictable inflation hurts your business because:
Ans:
- when prices change in unpredictable ways, it makes it difficult for the business to make planschecked
- high inflation will reduce the real value of savingschecked
- low inflation will increase the real interest ratechecked
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If the size of the underground economy is large,
A) government agencies have difficulty measuring nominal and real GDP. B) it is relatively easy to gather productivity data on many businesses. C) measuring real GDP is relatively easy, but measuring nominal GDP is difficult. D) measuring nominal GDP is relatively easy, but measuring real GDP is difficult.
Similarly to the Latin American region, the HPAE experienced a Lost Decade in the 1980s
Indicate whether the statement is true or false
If the expected price level exceeds the actual price level in an economy, _____
a. firms increase production in the short run b. firms decrease production in the short run c. firms maintain production in the short run but increase prices d. firms maintain production in the short run but decrease prices e. firms raise prices in the short run.
Market demand curves may slope downward even if some individual demand curves do not because
a. the law of demand requires that this is true. b. lower prices may bring more purchasers into the market. c. merchants try to sell more at lower prices. d. people believe expensive goods are better goods.