Unanticipated inflation arbitrarily:
A. "penalizes" those who borrow money.
B. "taxes" those who receive fixed money incomes.
C. "benefits" those who save money.
D. "subsidizes" those who receive fixed money incomes.
Answer: B
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One way to minimize the excess burden resulting from a specific tax is to:
a. tax only wealthy firms and individuals. b. spread the tax over many goods and services. c. tax goods for which either supply or demand is inelastic. d. tax luxury items such as yachts and sports cars.
Those who believe that market prices always incorporate all available information believe:
A. in the efficient-market hypothesis. B. that randomly choosing a stock is not as effective as technical or fundamental analysis. C. that current stock prices does not represent true value as correctly as is possible. D. All of these are true.
If a country's population grows at the same rate as its real GDP, then real per capita GDP:
a. doesn't change. b. grows at an increasing rate. c. decreases at a decreasing rate. d. grows at a constant rate.
From 1979 to 1982, the Fed targeted bank reserves as the monetary policy tool. One side effect of this strategy was:
A. the inflation rate increased to over 18 percent in 1983. B. inflation remained high for most of the 1980's. C. many banks failed that otherwise may not have. D. interest rates rose very high.