The "shoe-leather" cost of a fully anticipated inflation is
A) the inconvenience of holding less cash.
B) the higher prices of imported raw materials due to currency depreciation.
C) the extra time spent on shopping in order to beat price increases.
D) the effort of changing posted prices on price tags and producing new price lists and catalogs.
A
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As a result of an increase in the money supply, some banks may end up with excess reserves. What is the likely result?
A) Banks will raise interest rates. B) Banks will make more loans, thereby contributing to a decrease in aggregate demand. C) Banks will make more loans, thereby contributing to an increase in aggregate demand. D) Banks will spend the excess reserves by paying their employees more.
Market power guarantees profit
A) True, which is why firm's locate as far away from each other as possible. B) False, market power guarantees price greater than marginal cost. C) True, market power guarantees price greater than average cost. D) False, market power guarantees price equal to average cost.
The largest source of revenue for funding schools in the average US city is
a. federal income taxes b. state income taxes c. city property taxes d. state and city sales taxes
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.