Which of the following is not a consequence of hyperinflation?
A) Money's function as a medium of exchange is enhanced.
B) Money loses value so rapidly that firms and individuals stop holding it.
C) It causes an economy to suffer slow growth.
D) The price level grows in excess of hundreds of percentage points per year.
Answer: A
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The Friedman rule works because
A) it maximizes productivity. B) it eliminates over-consumption. C) it encourages people to hold the appropriate quantity of money. D) it can be implemented by the private sector.
Which of the following is a disadvantage of the benefit principle?
a. It cannot be applied to transfer programs. b. It does not apply to user charges. c. It is completely incompatible with efficiency. d. It closely resembles a market price.
On a graph for the Gini Coefficient, perfect inequality would be represented by the equation ______.
a. G = -1 b. G = 0 c. G = 1 d. G = 100
Refer to the above diagram. If AD1 shifts to AD2, then the equilibrium output and price level will be:
A. P1Q3. B. P1Q2. C. P2Q3. D. P2Q2.