When the inflation rate is high and volatile,
A) investment is less risky and gains from trade are reduced.
B) real output and real wages will grow rapidly.
C) employment will expand and the unemployment rate will decline.
D) investment is more risky and gains from trade are reduced.
D) investment is more risky and gains from trade are reduced.
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In the classical model, what is the result of an increase in aggregate demand?
A) The price level increases, and real GDP remains constant. B) The price level decreases, and real GDP remains constant. C) Real GDP increases, and the price level remains constant. D) Real GDP decreases, and the price level remains constant.
Central planners in command economies
a. generally set production targets for firms. b. always consult consumers on the output of goods they want to consume. c. allow prices to organize the economy's production. d. depend upon the invisible hand to coordinate economic activities.