Question

6. One possible benefit of moderate inflation is:

a. a reduction in boredom attributable to the changing prices.

b. the elimination of menu costs.

c. better functioning labor markets.

d. increased certainty about the future.

7. Variables expressed in terms of physical units or quantities are called_____ variables.

a. real

b. nominal

c. endogenous

d. exogenous

8. A small country might want to use the money of a large country rther than print its own money if the small country:

a. is likely to be unstable, whereas the large country is likely to be stable.

b. is likely to be stable, whereas the large country is likely to be unstable.

c. needs the revenue for seigniorage.

d. wants to control its own inflation rate.

Answer 1

6) Better functioning labor markets

option(C)

7) Real variables

option(A)

8) is likely to be unstable whereas the large country is likely to be stable

option(A)