Inflation is problematic if
a. it is less than the percentage increase in nominal income.
b. it is less than the nominal return on saving.
c. it equals the growth rate of real GDP in the long run.
d. it distorts relative prices, causing a misallocation of resources.
d
You might also like to view...
In a perfectly competitive market, a permanent increase in demand initially brings a higher price, economic
A) loss, and entry into the market. B) loss, and exit from the market. C) profit, and entry into the market. D) profit, and exit from the market.
One way investment banks differ from commercial banks is that investment banks
A) do not take in deposits. B) lend exclusively to households. C) only buy and sell mortgages. D) trade only in foreign exchange markets.
Suppose a lottery ticket costs $1and has a jackpot of $1 million. What must the probability of winning nothing be if the bet is fair?
a. 99% b. 99.9% c. 99.999% d. 99.9999%
Suppose acre A is located at the market with zero transport costs of bringing its radishes to market. It costs acre B, located 20 miles away, $500 to transport its radishes to market. If demand for radishes is large enough so that both acres will be used to produce radishes,
a. the owner of acre A will earn zero location rent b. the owner of acre B will earn location rent of $500 c. the owners of acres A and B will earn combined location rents of $1,000 d. as long as one acre is located at the market, neither landowner of acre A nor B will earn location rent e. the owner of acre A will earn a location rent of $500