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Which of the following is not a cost created by high​ inflation?

a. inflation causes the real interest rate to change which can make it more difficult to borrow and lend money.
b. inflation changes firms' prices which causes firms to have to use resources to physically change the marketed prices, often referred to as menu costs.
c. inflationary impacts are not distributed evenly across the population, therefore, inflation causes the economy to redistribute income acres households.
d. inflation causes the real wage to fall which means that firms have to pay more for workers.

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Joshua Stredder
Joshua StredderLv10
14 Mar 2021

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Related questions

1) As the unemployment rate rises:

A) the separation rate decreases.

B) the young and unskilled experience lower-than-average increases in unemployment.

C) the young and skilled experience larger-than-average increases in unemployment.

D) the young and unskilled experience larger-than-average increases in unemployment.

E) the proportion of the unemployed finding a job increases.

2) The natural level of employment will increase when which of the following occurs?

A) a decrease in the markup of prices over costs

B) an increase in the natural level of output

C) an increase in the actual unemployment rate

D) an increase in unemployment benefits

E) an increase in the markup of prices over costs

3) Suppose workers and firms expect the overall price level to increase by 4%. Given this information, we would expect that:

A) the real wage will decrease by 4%.

B) the real wage will increase by 4%.

C) the nominal wage will increase by less than 4%.

D) the nominal wage will increase by more than 4%.

E) the nominal wage will increase by exactly 4%.

4) An increase in the minimum wage will cause:

A) a reduction in the equilibrium real wage.

B) an increase in the natural rate of unemployment.

C) an increase in the equilibrium real wage.
D) a decrease in the natural rate of unemployment.

E) no change in the natural rate of unemployment.

5) In the aggregate demand relation, a reduction in the price level causes output to increase because of its effect on:

A) firms' markup over labor costs.

B) the nominal wage.

C) the interest rate.

D) the expected price level.

E) government spending.

6) The short-run aggregate supply curve (AS) is upward sloping because:

A) an increase in output causes an increase in employment, a reduction in unemployment, an increase in the nominal wage, and an increase in the price level.

B) a reduction in the aggregate price level causes a reduction in nominal money demand and a reduction in the interest rate.

C) a reduction in the aggregate price level (P) will cause a reduction in the interest rate and an increase in output.

D) an increase in the aggregate price level will cause an increase in the interest rate and a reduction in output.

E) an increase in the nominal wage causes a reduction in the amount of output that firms are willing to produce.

7) Assume that the economy is initially operating at the natural level of output. A simultaneous expansionary monetary policy and an increase in oil prices will cause which of the following?

A) an increase in output and a reduction in the interest rate in the short run

B) a reduction in output and an increase in the interest rate in the short run

C) a reduction in output and a reduction in the interest rate in the short run

D) an ambiguous effect in output and an increase in the price level in the short run

E) an ambiguous effect in output and a reduction in the price level in the short run

8) Assume that the economy is initially operating at the natural level of output. A one-time 4% reduction in the nominal money supply will cause:

A) a 4% increase in the price level in the medium run.

B) a 4% reduction in the price level in the medium run.

C) a 4% increase in the real money supply in the medium run.

D) a 4% increase in the interest rate (i) in the medium run.

E) a 4% reduction in investment in the medium run.

9) The original Phillips curve implied that:

A) the markup over labor costs is zero.

B) the expected inflation rate is equal to last year's inflation rate.

C) a lower rate of unemployment causes an increase in the rate of inflation.

D) the inflation is always zero.

E) the expected inflation is always zero.

10) In the Phillips curve equation, which of the following will NOT cause a rise in the current inflation rate?

A) a rise in the minimum wage

B) a rise in the expected inflation rate

C) a rise in the employment insurance

D) a drop in the markup

E) a fall in the unemployment rate

2. Using the AS and AD, WS and PS, and IS-LM graphs, illustrate and explain the short run and medium run effects of less stringent enforcement of existing antitrust legislation (Monopolist market power increased) . Explain what happens to P, Y, I, W/P, I and u.

1. The multiplier helps explain

   

A. why a decrease in taxes causes real Gross Domestic Product (GDP) to fall by more than the amount of the decrease in taxes.
   

B. why a fall in investment cause real Gross Domestic Product (GDP) to rise by more than the amount of the decrease in investment.
   

C. why a rise in government expenditures causes real Gross Domestic Product (GDP) to rise by more than the amount of the increase in government spending.
   

D. why an increase in disposable income causes real Gross Domestic Product (GDP) to rise by less than the amount of the increase in disposable income.

 

2. If the marginal propensity to save (MPS) increases, the multiplier

   

A. decreases.
   

B. can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC).
   

C. stays the same.
   

D. increases.

 

QUESTION 60

The investment function will shift when there is a change in

   

A. the opportunity cost of retained earnings.
   

B. firms' profit expectations.
   

C. the cost of borrowing.
   

D. the interest rate.

1.43 points

QUESTION 61

In the Keynesian model, whenever planned saving exceeds planned investment,

   

A. there will be unplanned inventory accumulation.
   

B. real GDP will not be influenced.
   

C. the interest rate will remain unchanged.
   

D. there will be unplanned inventory depletion.

 

1.43 points

QUESTION 62

In the Keynesian model, whenever planned saving is less than planned investment,

   

A. there will be unplanned inventory depletion.
   

B. the interest rate will remain unchanged.
   

C. there will be unplanned inventory accumulation.
   

D. real GDP will not be influenced.

 

1.43 points

QUESTION 63

Government purchases

   

A. are determined by the political process.
   

B. are determined by the public.
   

C. are influenced by interest rates.
   

D. are determined by suppliers.

 

1.43 points

QUESTION 64

If, at some level of output, total planned real expenditures are less than real Gross Domestic Product (GDP),

   

A. real GDP will either fall or remain unchanged, depending on the MPC.
   

B. real GDP will rise.
   

C. real GDP remains unchanged.
   

D. unplanned inventories will increase and real GDP will fall.

 

1.43 points

QUESTION 65

When the economy is operating at the equilibrium level of GDP, we know that

   

A. total planned real expenditures equal real GDP.
   

B. real net exports equal inventory changes.
   

C. planned real investment spending equals real net exports of zero.
   

D. total planned real consumption expenditures equal real GDP.

 

1.43 points

QUESTION 66

One divided by the marginal propensity to save (MPS) is the formula for

   

A. the inverse of the multiplier.
   

B. the multiplier.
   

C. one minus the multiplier.
   

D. autonomous consumption.

 

QUESTION 67

Thinking like an economist would, which is true of investment?

   

A. Investment represents spending on capital goods.
   

B. Investment is a stock concept.
   

C. Investment is putting money into stocks and bonds.
   

D. It is the portion of disposable income that is not used for consumption or saving.

 

QUESTION 68

Other things being equal, if input prices rise in a country, then there would be

   

A. cost-push inflation.
   

B. demand-pull inflation.
   

C. cost-pull deflation.
   

D. more production and a lower price level.

 

QUESTION 69

In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that

   

A. existing capital equipment can be used more intensively.
   

B. wage rates rise almost simultaneously with the price level.
   

C. the unemployment rate usually rises dramatically along with the price level.
   

D. workers can be switched from counted to uncounted production.

1) Workers in one country are more productive than workers in another country because

-they have more complementary factors to work with.

-they have fewer complementary factors to work with.

-they are better motivated and paid.

2) Conservative economists would like to help younger workers get work experience by

-setting up a government jobs program.

-raising the minimum wage rate.

-lowering the minimum wage rate.

-passing a law requiring employers to hire teenagers ahead of older workers who are equally qualified.

3) The Supreme Court's "rule of reason"

-has been applied since the time of the Civil War.

-has been applied since 1945.

-was applied from 1911 to 1945.

-has been applied since 1970.

4) Which is the smallest American labor union?

-United Auto Workers

-The International Brotherhood of Teamsters

-The National Education Association

-The Service Employees International Union

5) The Change to Win coalition recently mounted a national recruiting drive, primarily targeting _______.

-All of these jobs were targeted

-cashiers

-janitors

-dishwashers

6) The demand for labor is

-determined by the supply of labor.

-determined by the wage rate.

-its marginal revenue product schedule.

-higher at lower wage rates.

7) Economic rent is associated with

-low wages.

-agricultural workers.

-factory workers.

-high wages.

8) Which statement is true?

-The most important influence on a firm's demand for a factor of production is the demand for the final product.

-All of the statements are true.

-A firm will keep hiring more and more of a resource up to the point at which its MRP is equal to its price.

-If the MRP of the last worker hired is higher than the wage rate, the firm has hired too few workers.

9) Amelia Earhart's nominal wages rose from $40,000 to $50,000, while the CPI rose by 20%. Her real wages

-rose.

-fell.

-cannot be calculated with the available information.

-stayed the same.

10) Which of the following is NOT an example of a vertical merger?

-The merger of two computer companies

-The merger of an automobile company and a tire company

-The merger of a computer company and a microelectronics chip company

-The merger of a shoe producer and a leather producer

11) The demand for a resource rises as

-its productivity falls and prices of substitutable resources falls.

-its productivity rises and the prices of substitutable resources falls.

-its productivity rises and the relative prices of substitutable resources rises.

-its productivity falls and the relative prices of substitutable resources falls.

12) Interlocking directorates were expressly forbidden under the

-neither the Sherman Act nor the Clayton Act.

-both the Sherman and Clayton Acts.

-Clayton Act.

-Sherman Act.

13) A firm's demand for labor is

-its MRP schedule.

-determined by the going wage rate.

-shaped mainly by the supply of labor.

14) If unions are successful in negotiating a wage higher than the market equilibrium wage, and also guarantee employers that they can hire as many labor hours as they desire per week at the union wage,

-all workers who join the union will be guaranteed a job.

-the quantity of labor demanded will exceed the quantity supplied at the union wage.

-the quantity of labor demanded will equal the quantity supplied at the union wage.

-the quantity of labor demanded will fall short of the quantity supplied at the union wage.

15) Which of the following offers the best example of derived demand?

-An increase in the demand for cars causes an increase in the demand for gasoline.

-An increase in the demand for movie tickets causes an increase in the demand for popcorn.

-A decline in the demand for cars causes an increase in the demand for bus rides.

-An increase in demand for movie tickets causes an increase in the demand for movie theatre workers.

16) A "bill of rights" for union members and a provision of union election procedures were two of the main provisions of the _____ Act.

-Landrum-Griffin

-Sherman Antitrust

-National Labor Relations

-Taft-Hartley

17) The decision to bring suit in an antitrust case is usually made by

-the Supreme Court or a lower federal court.

-the injured party.

-the Department of Commerce.

-the Department of Justice.

18) At its peak labor union membership was about _____% of the labor force.

-35

-45

-15

-25

19) Combinations in restraint of trade are prohibited by

-the Sherman Act.

-the Federal Trade Commission Act.

-The Clayton Act.

20) Which statement is true?

-American manufacturing wages are the highest in the world.

-American manufacturing wage rates are the lowest of any industrial country.

-Our manufacturing wage rates are the second highest in the world.

-None of the statements are true. MICROECONOMIC

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