Proponents of zero inflation argue that a successful program to reduce inflation
a. eventually reduces inflation expectations.
b. eventually raises real interest rates.
c. permanently decreases output.
d. permanently raises unemployment.
a
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Refer to above figure. In the absence of trade, how many Widgets does this country consume?
What will be an ideal response?
The marginal utility gained from the consumption of successive units of a typical good:
A. tends to decrease. B. tends to increase. C. may increase or decrease depending on the cost of the good. D. tends to stay the same.
It may be that unions increase worker productivity by
a. minimizing conflicts, resolving differences, and reducing job turnover b. using seniority rules to keep the most experienced workers employed c. increasing job turnover so that the least experienced workers quit d. allowing workers to goof off, which improves morale e. increasing the number of workers required to perform each task
Inflation distorts relative prices. What does this mean and why does it impose a cost on society?