A study of countries with high inflation rates indicates that the inflation is generally
a. caused by strong labor unions.
b. the result of restrictive macroeconomic policy, which pushes up interest rates.
c. caused by supply shocks.
d. the result of rapid growth in the money supply.
D
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As debit cards become more popular, individuals will reduce their holdings of currency. Other things constant, how will this impact the money supply?
a. Because more money is held as deposits at banks, the money supply will fall. b. Because more money is held as deposits at banks, the money supply will expand. c. Because debit card expenditures are counted in M2 but not M1, the M1 money supply will fall. d. Because debit card expenditures are counted in M1 but not M2, the M2 money supply will fall.
Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?
a. The investment expenditures of the unionized employer will tend to fall. b. Employment in the nonunion sector will tend to fall. c. The costs of the unionized employer will tend to fall. d. The output of the unionized employer will tend to increase.
According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be
A) a shortage of 30 million gallons.
B) a surplus of 30 million gallons.
C) a shortage of 20 million gallons.
D) a surplus of 50 million gallons.
In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite. B) high relative to expected marginal benefits of the agreement. C) low relative to expected marginal benefits of the agreement. D) determined by the Environmental Protection Agency.