The type of inflation that is a greater problem to society is
a. unanticipated inflation, since it has some costs associated with it, such as menu costs.
b. unanticipated inflation, since it causes greater redistribution of income between those making payments and those awaiting payments in the future.
c. anticipated inflation because the purchasing power of the dollar falls very rapidly
d. anticipated inflation, since people have to pay taxes on the higher nominal income even though the real income has not changed.
Ans: b. unanticipated inflation, since it causes greater redistribution of income between those making payments and those awaiting payments in the future.
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The expected future exchange rate has ________ on the supply of dollars and has ________ on the demand for dollars
A) no effect; no effect B) an effect; no effect C) an effect; an effect D) no effect; an effect E) an effect sometimes; an effect sometimes
If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed cost of production if it expands output to 25 units
A) $300 B) $15 C) $12 D) It is impossible to determine without additional information.