Shoe-leather costs refer to:
A. the money, time, and opportunity used to change prices to keep pace with inflation.
B. the time, money, and effort one has to spend managing cash in the face of inflation.
C. being penalized via taxes for making more money in dollars, even though real purchasing power hasn't changed at all.
D. labor costs associated with inflation.
B. the time, money, and effort one has to spend managing cash in the face of inflation.
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On any given day, ________ changes to achieve equilibrium in the money market
A) the nominal interest rate B) the price level C) the real interest rate D) the inflation rate E) real GDP
Refer to Figure 2-6. If the economy is currently producing at point C, what is the opportunity cost of moving to point B?
A) 26 thousand forks B) 20 thousand spoons C) 46 thousand forks D) 40 thousand spoons
Assume there is an increase in government spending and a reduction in net taxes. With a specific money supply, the consequent:
A. contractionary impact might be lessened by the resulting increase in the interest rate. B. expansionary impact might be lessened by the resulting increase in the interest rate. C. contractionary impact might be enhanced by the resulting decline in the interest rate. D. expansionary impact might be enhanced by the resulting decline in the interest rate.
Suppose you deposit $2,000 into Bank of America and that the required reserve ratio is 10 percent. How does this affect the bank's balance sheet?
A) Reserves rise by $200. B) Required reserves rise by $2,000. C) Deposits rise by $1,000. D) Excess reserves rise by $1,800.