Consider an economy that has the following monetary data.
The monetary base and the money supply are expected to grow at a constant rate of 20% per year. Inflation and expected inflation are 20% per year. Suppose that bank reserves and currency pay no interest, all currency is held by the public, and bank deposits pay no interest. What is the cost to the public of the inflation tax?
A. $190
B. $60
C. $140
D. $200
Answer: D
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Suppose that the demand for labor decreases due to an economic downturn, and union workers are in the first year of a 3-year labor contract
With respect to these union laborers, the economic downturn will most likely ________ the nominal wage and ________ the quantity of labor hired. A) decrease; not change B) decrease; decrease C) not change; decrease D) not change; not change
AK growth models argue that which type or types of capital may not be subject to diminishing returns?
A) only physical capital B) physical capital and human capital C) human capital and knowledge D) knowledge and physical capital
If consumers spend more money on coffee than on sugar, then the demand for a pound of coffee is probably _________________ than is the demand for a pound sugar of because ________________.
A. less price elastic; coffee requires a larger portion of consumers' incomes. B. more price elastic; coffee requires a larger portion of consumers' incomes. C. less price elastic; people will take a longer time to adjust to the change in its price. D. more price elastic; people will take a longer time to adjust to the change in its price
A production function represents:
A. the relationship between the quantity of inputs and the quantity of outputs. B. the relative values of the inputs and modes of production. C. the relative costs of the inputs across various modes of production. D. the relationship between the cost of the inputs and the revenue generated by the outputs.