Which of the following do not suffer the costs of inflation?
A) firms that have to devote more time and labor to raising prices
B) persons on fixed incomes
C) persons whose incomes rise more rapidly than inflation
D) an investor that has to pay higher taxes because of the inflation
C
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Which of the following activities is NOT a primary concern of investment banks?
A) taking in deposits and making loans B) providing advice and financing for mergers and acquisitions C) underwriting new security issues D) providing advice on new security issues
In the rational expectations model
a. markets are perfectly competitive and in equilibrium. b. markets may not clear even if wages and prices are otherwise perfectly flexible. c. markets may temporarily be in disequilibrium. d. only anticipated changes in aggregate demand affect output.