Based on the redistributive income effects of inflation, who "loses" when there is inflation? (3)
What will be an ideal response?
1) locality bank who has many loans at a fixed interest rate
2) Marco who has a 5-year wage contract specifying constant wages
2) Grandma JoJo who lives off of a fixed pension
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The consumer's income is $800.According to the above figure, why doesn't the consumer choose the combination of 30X and 56Y at point A?
A. MRS is greater than PX / PY . B. MUX / PX is less than MUY / PY . C. MUX is greater than MUY . D. MRS is less than PX / PX .
Economic profit is the difference between
A. accounting profit and explicit costs. B. total revenue and the opportunity cost of all of the resources used in production. C. total revenue and the implicit costs of using owner-supplied resources. D. accounting profit and the opportunity cost of the market-supplied resources used by the firm.
A decrease in aggregate demand in the short run will reduce:
A. Both real output and the price level B. The price level and increase the real domestic output C. The real domestic output and have no effect on the price level D. The price level and have no effect on real domestic output
If two countries engage in Free Trade following the principles of comparative advantage, then
A) neither relative prices nor relative marginal costs (marginal rates of transformation-MRTs) in one country will equal those in the other country. B) both relative prices and MRTs will become equal in both countries. C) relative prices but not MRTs will become equal in both countries. D) MRTs but not relative prices will become equal in both countries. E) trade will be unrestricted, regardless of relative costs and MRTs.