A person who argues that inflation "robs us of the purchasing power of our paychecks" should also consider that inflation
a. increases the value of the dollar, making paychecks worth more.
b. will increase the size of paychecks as well as the prices of goods.
c. does not affect the value of the dollar, either in paychecks or in prices.
d. only affects the prices of things that we buy, not the prices of things that we sell.
B
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Refer to Figure 13-10. to answer the following questions
a. What is the profit-maximizing output level? b. What is the profit-maximizing price? c. At the profit-maximizing output level, how much profit will be realized? d. Does this graph most likely represent the long run or the short run? Why?
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease