The purchasing power of the Zimbabwean dollar:
A. rose because when inflation rises, purchasing power rises.
B. fell because there was more money chasing the same goods.
C. rose because the money supply rose but real output did not.
D. fell because people would not accept the newly-printed money.
Ans: B. fell because there was more money chasing the same goods.
Economics
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Economics
Suppose you were given a gift of a gold mine that generates $1,000 of net income every year, indefinitely. And suppose the equilibrium rate of interest is 5 percent. What is the present value of that gold mine?
a. $20,000 b. $5,000 c. $50,000 d. $500,000 e. $10,000
Economics