Costs that tend to deter firms from changing their prices in response to changes in the market equilibrium price are referred to as
A. burden costs.
B. small menu costs.
C. real menu costs.
D. large menu costs.
Answer: B
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A study by economists at the International Monetary Fund compared increases in inflation rates in countries with and without specific inflation targets based on the surge in oil prices in 2007. The results provide
A) no evidence that countries with specific inflation targets were any better off than countries without specific inflation targets. B) evidence that countries with specific inflation targets actually experienced greater increases in inflation than did countries without specific inflation targets. C) evidence that countries with specific inflation targets did experience lower increases in inflation than did countries without specific inflation targets. D) evidence that countries with specific inflation targets experienced no increases in inflation, whereas countries without specific inflation targets experienced significant increases in inflation.
An increase in a country's saving rate will tend to cause which of the following in the long run?
A) a reduction in per capita real GDP B) an increase in economic growth C) an increase in the unemployment rate D) an increase in the rate of inflation
The relevant market is defined as the set of goods whose
a. price elasticities of demand are low b. cross elasticities with other goods outside the set are high c. price elasticities of demand are high d. income elasticities of demand are high e. cross elasticities with other goods in the set are high
What happens to each of the following if the supply of loanable funds shifts right? A. the interest rate B. net capital outflow C. the exchange rate