The cost of inflation to society includes I. The opportunity costs of resources used by people to protect themselves against inflation II. The costs associated with recalculating prices
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C
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Suppose consumers view the George Foreman Grill and the Weber charcoal grill as close substitutes. Other things constant, a fall in the price of the George Foreman Grill would tend to
A) increase the demand for the Weber grill. B) increase the demand for the George Foreman Grill. C) decrease the demand for the Weber grill. D) decrease the demand for the George Foreman Grill.
Suppose the economy is at point B. If firms expect profits will be higher in the future, to what point might the economy's move in the short run?
A) It stays at point B. B) It shifts to a point such as A. C) It shifts to a point such as C. D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.
Both screening and signaling:
A. are ways to decrease information asymmetry between two parties. B. correct inefficiency in the market. C. can increase surplus gained in a market. D. All of these statements are true.
Nominal gross domestic product is based on the existing prices at which final goods are actually sold
a. True b. False Indicate whether the statement is true or false