Which of the following would be considered a resource cost of inflation?
a. A cost of living adjustment
b. Loss of purchasing power
c. Additional trips to the bank
d. Adjusting nominal interest rate to get real rates
e. Creeping inflation
C
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The textbook cautions against speaking of "the people" as wanting a particular good
A) because it is not clear in what sense groups as distinct from individuals can ever have wants. B) because people rarely know what they themselves really want. C) because the wants of the people are relevant only in a democracy. D) because assertions about "the people" confuse economics with politics. E) unless the majority has clearly voted for it.
Rate of return regulation is equivalent to
A) average cost pricing rule. B) marginal cost pricing rule. C) maximizing consumer surplus. D) maximizing producer surplus.