The cost to firms of changing prices
A) is small even when there is rapid inflation.
B) is called a menu cost.
C) does not exist if inflation is perfectly anticipated.
D) all of the above
Answer: B
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The theory of investment that emphasizes the roles of real interest rates and taxes is known as the
A) multiplier model. B) accelerator model. C) Q-theory of investment. D) neoclassical theory of investment.
Business decisions must be undertaken with a view of comparing the costs of the decision with its benefits
Indicate whether the statement is true or false
Less-developed countries are poor for all of the following reasons except one. Which one?
A. The labor force is too small. B. Labor productivity is low. C. Investment funds tend to flow abroad D. Investment in human capital is very low.
The opportunity cost of producing a good is the additional labor cost incurred to produce an extra unit of the good.
Answer the following statement true (T) or false (F)