Unformatted text preview: 2T. 28. 29'. 30. 31. 32. 33. Menu costs refers to a. the cost ofmore ﬁ'equent price changes inducedby higher inﬂation. b. the distortion in incentives created by inﬂation when taxes do not adjust for inﬂation c. resources used by people to maintain lower money holdings when inﬂation is high. d. the distortion in resource allocation created hyuncertainty coneerning relative price
changes created by inﬂation Based on the quantity equation, ifM=1UD, Y=3, and 1'= 200, then P=
a. l. b. 1.5. c. 2. :1 None of the above is correct. A. poor cormtry decides to institute an invesunenttas credit. As a result
a. interestrat'es fall and investment rises.
b. both interest rates and investment fall
c. both interest rates and inteshnent rise.
:1 interestrates rise and investment falls. Whiehofthe followiugistiie most accurate statement ahouttherelationship betweenthenoruinal interest rate and
ﬂierealinterestrate? a. 'I'herealmterestrateisﬂieneruinalinterestrate dividedhy therate ofinﬂation. b. 'Iherealmterestrateisﬂieneminalinterestrateplustherateofiuﬂaﬁon c. Iherealmterestrateisﬂienominalmterestrateminusﬂierateofinﬂaﬁon d. lherealmterestrateisﬂieneminalinterestrateﬁmesﬂierateofinﬂaﬁon Your hoss gives you an increase in the number of dollars you earn per hour. This increase in pay malres
a. your real wage decrease. Ifyour real wage rose by a greater percentage than the price
level, thenyour nominal wage decreased.
b. your real wage increase. Ifyour real wage rose by a greater peroentage than theprice
level, thenyour nominal wage also increased.
c. your nominal wage iuerease. Ifyour nominalwage rose by a greaterpercentageﬂianthe
price level, theuyour real wage decreased
:1 your nominal wage iuerease It'your nomimlwage rose by a greater percentagethanthe
price level, thenyour real wage also increased. Creditcardsare
a. aunitof account. Discouraged workers a. are not counted either as part ofthe adult population or as part ofthe labour foroe.
b. are counted as part ofthe adult population, and as unemployed. c. are counted as part oftlie adult population, but not as part ofthe labour force. d. None the above are correct ...
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- Winter '10