Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly.
B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic.
C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run.
D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
B
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Fear of floating is:
A) when the benefits of floating exchange rates outweigh the costs. B) when the attractions of fixed exchange rates are large relative to those of floating. C) when countries adopt the gold standard. D) when countries say they are floating, but fix their exchange rates in practice.
The costs of inflation depend upon
A) whether it is anticipated or unanticipated. B) who pays it and who receives it. C) the future savings rate. D) none of the above.