Inflation makes it difficult to distinguish relative price changes from changes in the general level of prices. Consequently, inflation ________ the efficiency of the market system.
A. decreases
B. does not change
C. increases
D. may either increase or decrease
Answer: A
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A positive externality will cause a market to produce
a. more than is socially desirable. b. less than is socially desirable. c. the socially optimal equilibrium amount. d. more than the same market would produce in the presence of a negative externality.
In the event that China rises, and the U.S. overcomes its setbacks and does not decline further, the situation may be similar to that seen in the Cold War, one of
a. bipolarity. b. unipolarity. c. anarchy. d. multipolarity
Matthew just graduated from culinary school. He can earn $40,000 a year working for the same local bakery he has worked at since before starting culinary school, or accept a job offer he received after graduation from a high-end restaurant paying $70,000 a year. The higher salary is a result of
a. a compensating differential. b. efficient union bargaining. c. having more human capital. d. pure luck.
Which of the following is true?
A) In the long run, corporate bonds can be expected to yield a higher real rate of return than ownership of stocks. B) The risk of stock market investments can be reduced through the holding of a diverse portfolio of unrelated stocks over long periods of time. C) Stock market investors can reduce their risk if they hold shares of specific stocks for only short periods of time. D) People who invest in the stock market are virtually certain to make money.