Many economies have seemed to get by even in the face of inflation rates in the thousands. How would you nevertheless explain the fundamental harm done by high inflation?
What will be an ideal response?
The fundamental issue is the role of money in providing an efficient economy. To the extent that the value of money cannot be relied on to be relatively constant for long periods, various economic actors must rely on less efficient forms of exchange and spend considerable resources trying to protect themselves from the impact of inflation. Resources tend to move into less productive assets and activities.
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Wealth is to ________ as capital stock is to ________
A) investment; saving B) saving; investment C) income; net investment D) income; earnings E) saving; depreciation
If people work less as the wage rate increases, their labor supply curves are backward bending
Indicate whether the statement is true or false
What insight into human behavior do economist learn from observing people playing the ultimatum game?
Of the total M1, currency accounts for a little more than _____%.
A. 20 B. 30 C. 40 D. 50