Consider the following ratio: the average annual inflation rate/the average annual money growth rate. A country with a ratio less than one would have:
A. to have a high unemployment rate.
B. an economy suffering from a recession.
C. an average inflation rate less than the average rate of money growth.
D. an average inflation rate greater than the average rate of money growth.
Answer: C
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How do legal controls on prices lead to corruption?
A. Persons who benefit from the controls are willing to bribe officials to keep the controls in place. B. Persons who make the laws may favor certain groups at the expense of others. C. Selling in the black market is very profitable, and persons therefore willingly break the law. D. Discrimination may occur as a means to limit buying or selling select groups. E. All of these responses are correct.
Interest is the reward offered to households to encourage current consumption because they value future consumption more than current consumption
Indicate whether the statement is true or false
Which of the following statements is false?
A) When marginal cost equals average total cost, average total cost is at its highest value. B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. C) The difference between average total cost and average fixed cost is average variable cost. D) Firms often refer to the process of lowering average fixed cost as "spreading the overhead."
An energy company has recently discovered a natural gas reserve. The company can tap this reserve at a cost of $350,000 and obtain a profit of $450,000 in three years. The current market rate is 15 percent. Should the company make the investment?
A. Yes, the future value of the profit is greater than the present value of the cost B. No, the future value of the profit is less than the present value of the cost C. Yes, the present value of the profit is greater than the present value of the cost D. No, the present value of the profit is less than the present value of the cost