Lower rates of inflation increase planned spending because:
A. the Fed reacts to the lower inflation by lowering interest rates.
B. resources are redistributed from high-spending households to low-spending households.
C. the reduction in wealth, resulting from the reduced real value of money, restrains spending.
D. the prices of domestic goods sold abroad increase (with a constant exchange rate).
Answer: A
You might also like to view...
Jeff runs a bakery that is famous for its handmade sweet buns. Suppose the elasticity of demand for sweet buns is equal to 0.21, then an increase in the price of the buns: a. will result in a decrease in the supply of sweet buns. b. will result in an increase in the demand for sweet buns
c. will result in a decrease in the total revenue earned by Jeff. d. will result in an increase in the total revenue earned by Jeff.
In the early ________, computers became powerful enough to have a real economic impact.
A. 1970s B. 1990s C. 1980s D. 2000s
Refer to the accompanying figure, which shows the market for cups of coffee. At the original market equilibrium:
A. 60 cups are sold per hour at a price of $1.50 each. B. 50 cups are sold per hour at a price of $2.50 each. C. 50 cups are sold per hour at a price of $1.00 each. D. 40 cups are sold per hour at a price of $2.00 each.
Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.
What will be an ideal response?