Which of the following is correct? Inflation
a. impedes financial markets in their role of allocating resources.
b. reduces the purchasing power of the average consumer.
c. generally increases after-tax real interest rates.
d. is most costly when anticipated.
a
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The liquidity preference function shows that as ________
A) real income decreases, so does the demand for real money balances B) the nominal interest rate increases, so does the demand for real money balances C) real income decreases, so does the real interest rate D) all of the above E) none of the above
Which of the following is not an effort by McDonald's to cope with diseconomies of scale?
a. being exposed to country and regions risk, such as environmental protests b. putting mini-restaurants in airports, gas stations, and Wal-Marts c. allowing managers in each region of the U.S. more leeway in pricing and promotion d. reducing product development time e. closing unprofitable restaurants