Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the formAVC = a + bQ + cQ2and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000.At Straker Industries, average variable cost (AVC) reaches its minimum value at ________.

Inflation is problematic if

a. it is less than the percentage increase in nominal income. b. it is less than the nominal return on saving. c. it equals the growth rate of real GDP in the long run. d. it distorts relative prices, causing a misallocation of resources.

When the anticipated rate of inflation declines, the real rate of interest

A) increases. B) decreases. C) is not affected. D) increases exponentially.