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11.              When inflation rises, people will desire to hold a.less money

Question : 11.              When inflation rises, people will desire to hold a.less money : 1487789

 

11.              When inflation rises, people will desire to hold

a.less money and will go to the bank less frequently.

b.less money and will go to the bank more frequently.

c.more money and will go to the bank less frequently.

d.more money and will go to the bank more frequently.

12.              When inflation rises, people tend to go to the bank

a.more often, giving rise to menu costs.

b.more often, giving rise to shoeleather costs.

c.less often, giving rise to  redistribution costs.

d.less often, thereby lessening the severity of the inflation tax.

13.              When inflation rises, the nominal interest rate

a.rises, and people desire to hold more money.

b.rises, and people desire to hold less money.

c.falls, and people desire to hold more money.

d.falls, and people desire to hold less money

14.              People go to the bank more frequently to reduce currency holdings when inflation is high.  The sacrifice of time and convenience that is involved in doing that is referred to as

a.inflation-induced tax distortion.

b.relative-price-variability cost.

c.shoeleather cost.

d.menu cost.

15.              Which of the following is an example of menu costs?

a.deciding on new prices

b.printing new price lists

c.advertising new prices

d.All of the above are examples of menu costs.

16.              When inflation rises, firms make

a.more frequent price changes.  This raises their menu costs.

b.more frequent price changes.  This reduces their menu costs.

c.less frequent price changes.  This raises their menu costs.

d.less frequent price changes.  This reduces their menu costs.

17.              The costs of changing price tags and price listings are known as

a.inflation-induced tax distortions.

b.relative-price variability costs.

c.shoeleather costs.

d.menu costs.

18.              Menu costs refers to

a.resources used by people to maintain lower money holdings when inflation is high.

b.resources used to price shop during times of high inflation.

c.the distortion in incentives created by inflation when taxes do not adjust for inflation.

d.the cost of more frequent price changes induced by higher inflation.

19.              When inflation rises, people

a.make less frequent trips to the bank and firms make less frequent price changes.

b.make less frequent trips to the bank while firms make more frequent price changes.

c.make more frequent trips to the bank while firms make less frequent price changes.

d.make more frequent trips to the bank and firms make more frequent price changes.

20.              When inflation falls, people

a.make less frequent trips to the bank and firms make less frequent price changes.

b.make less frequent trips to the bank while firms make more frequent price changes.

c.make more frequent trips to the bank while firms make less frequent price changes.

d.make more frequent trips to the bank and firms make more frequent price changes.

 

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