Explain the costs imposed by an increase in inflation
What will be an ideal response?
The answers to this question should include a discussion of: shoe-leather costs, tax distortions, money illusion, and inflation variability.
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Figure 7-1
. In Figure 7-1, which graph best represents total physical product with diminishing returns?
A. 1 B. 2 C. 3 D. 4
Many state and local governments find themselves faced with increasing retirement expenditures for retired government employees. These increasing expenditures will ________ GDP because they are categorized as ________
A) increase; government purchases B) increase; gross private domestic investment C) decrease; state and local government purchases D) not change; transfer payments.
Which of the following scenarios best illustrates the concept of cyclical unemployment?
A. Grace loses her job because of new automated machinery. B. Sean quits his job to look for work that is more fun. C. Ellen quits looking for work because she doesn’t think she can find a suitable job. D. Marian loses her job because of a recession.
If your marginal propensity to consume is 0.8, how much more would you have to make in disposable income in order to save $10,000?
a. $12,500 b. $20,000 c. $50,000 d. $80,000