The uncertainty costs of inflation cause people to
A) incur more shoe leather costs.
B) increase their demand for money.
C) focus on the long run, which increases investment and speeds growth.
D) focus on the short run, which decreases investment and slows growth.
E) increase investment causing economic growth to decrease.
D
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Suppose Ann can produce 8 units of a material good (M) or 4 units of a spiritual good (S) in a day, while Ben can produce only 3 Ms or 3 Ss in a day. Both Ben and Ann can potentially produce a larger combination of M and S if
A) Ann produces both M and S and Ben produces neither. B) Ann specializes in M and Ben specializes in S and neither of them trade. C) Ann specializes in S and Ben specializes in M and they exchange with one another. D) Ann specializes in M and Ben specializes in S and they exchange with one another.
Monetarism resembles Keynesian thinking in that they both
a. emphasize supply and ignore demand. b. integrate supply-side analysis into their models. c. emphasize demand side effects. d. emphasize the importance of fiscal policy.