As the rate of inflation increases, the increased cost to a consumer of more frequent trips to the bank to make cash withdrawals represents an increase in the:
A. tax distortion generated by inflation.
B. erosion of the purchasing power of cash.
C. "noise" in the price system.
D. shoe leather costs of inflation.
Answer: D
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When the Pilgrims first arrived in North America, they established communal ownership of all pastures and of all agricultural production. As is common with communal ownership, this communal ownership by the Pilgrims resulted in
A) underproduction and underconsumption. B) underproduction and overconsumption. C) overproduction and underconsumption. D) overproduction and overconsumption.
For most consumer goods, the price elasticity of demand is
A) negative only when price decreases. B) negative regardless of the direction of the price change. C) positive only when price decreases. D) positive regardless of the direction of the price change.
The study of the decision-making process of government is the study of:
A. Keynesian economics. B. public choice theory. C. rational expectations theory. D. social economics.
The price of leisure is the wage rate.
Answer the following statement true (T) or false (F)