In a hyperinflation, the economy:
A. always collapses.
B. can continue to function because people build expected inflation into wages and prices.
C. will slow on its own to lower inflation.
D. can continue to function but people are unwilling to hold any money.
Answer: B
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The question of "How are goods and services produced?" most closely addresses which of the following issues?
A) Why are Christmas trees popular only in December? B) Should contractors build residential housing or shopping malls? C) Is income distributed fairly in the United States? D) Should Ford build SUVs or luxury cars? E) Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs?
When the United States imposes an import quota on a good, the amount of the ________ in U.S. consumer surplus is ________ the amount of the ________ in U.S. producer surplus
A) increase; smaller than; increase B) decrease; larger than; decrease C) decrease; larger than; increase D) decrease; equal to; increase
Fixed exchange rates are determined in free markets by the forces of demand and supply
a. True b. False Indicate whether the statement is true or false