Homework Answers
Answer 37: menu cost
Menu costs are the cost for the changing prices and this originated from the restaurant menu card prices. Restaurants constantly change the prices when there is an increase or decrease of price due to inflation.
Answer 38: 3.2 percent
Nominal interest = 8 percent
Tax percentage = 10%
Nominal interest after taxes = 8 -(8*0.1) = 8-0.8 = 7.2
Real rate of interest = 7.2-4 = 3.2
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Question 37 (1 point) Which inflation cost matters even if actual inflation and expected inflation are...
Which inflation cost matters even if actual inflation and expected inflation are the same? losses in...
Which inflation cost matters even if actual inflation and expected inflation are the same? losses in tax revenue O losses in real income production costs menu costs
Question 12 (1 point) Suppose the price level, as measured by the GDP deflator, is 1.14,...
Question 12 (1 point) Suppose the price level, as measured by the GDP deflator, is 1.14, the supply of money, measured by M1, is $3.4 trillion, and output, measured by real GDP, is $16.6 trillion. What is the velocity of money? Provide your answer as a number rounded to two decimal places. Do not include any symbols, such as "S," ", " "%," or "," in your answer. Your Answer: Answer Question 13 (1 point) Suppose the growth in the...
Question 37 (1 point) The shape of the aggregate demand curve is explained by the: O...
Question 37 (1 point) The shape of the aggregate demand curve is explained by the: O rate of inflation and the natural rate of unemployment. law of demand. policies to stabilize prices and reduce unemployment. interest rate, real balances, and foreign trade effects.
Question 37 (1 point) It can be cost-effective to pursue economies of scale only if: a)...
Question 37 (1 point) It can be cost-effective to pursue economies of scale only if: a) marginal product is diminishing. b) demand is small. c) demand is large. d) marginal cost is increasing. Question 38 (1 point) Cost per unit of output is also referred to as total cost a) False True Question 39 (1 point) Toyota spent over $1 billion to develop the Prius. For Toyota, the $1 billion was a sunk cost. a) True b) False
Question 33 (1 point) Which statement best explains why governments may prefer an inflation tax to...
Question 33 (1 point) Which statement best explains why governments may prefer an inflation tax to some other kind of tax? The inflation tax falls mainly on high-income individuals. The inflation tax reduces inflation. The inflation tax is easier to impose. The inflation tax reduces the real cost of government expenditure. Question 34 (1 point) How can people avoid the inflation tax? by reducing cash holdings by not filing a tax return by spending less by reducing savings
The amount by which actual or expected sales exceeds break-even sales is referred to as contribution...
The amount by which actual or expected sales exceeds break-even sales is referred to as contribution margin margin of safety unanticipated profit. target net income. Question 22 Cost structure cannot be significantly changed by companies generally has little impact on profitability. refers to the relative proportion of fixed versus variable costs that a company incurs. refers to the relative proportion of operating versus nonoperating costs that a company incurs Question 19 The break-even point is where total sales equal total...
Question 18 (1 point) Assume that the inflation rate during the last year was 1.97 percent....
Question 18 (1 point) Assume that the inflation rate during the last year was 1.97 percent. US government T-bills had the nominal rates of return of 3.54 percent. What is the real rate of return for a T-bill? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units
Question 68 (1 point) Suppose a banking system has $ 125,000 of checkable deposits and actual...
Question 68 (1 point) Suppose a banking system has $ 125,000 of checkable deposits and actual reserves of $ 17,000. If the reserve ratio is 9% Excess Reserves in the banking system are equal to: $ (Put only numbers in your answer; do not put a dollar sign in your answer.) Your Answer: Answer Question 69 (1 point) Suppose a banking system has $ 120,000 of checkable deposits and actual reserves of $ 16,000. If the reserve ratio is 6%...
For each of the following separate situations, determine the associated cost of inflation. (1) shoe-leather costs;...
For each of the following separate situations, determine the associated cost of inflation. (1) shoe-leather costs; (2) money illusion; (3) menu costs; (4) future price level uncertainty; (5) wealth redistribution; (6) price confusion; or (7) tax distortions. Wages of computer scientists always rise because our economy needs more and more computer scientist over time. A grandpa talked to his grandson, “When I was young, everything was so cheap. Now everything is too expensive.” Mary does not want to lend money...
For each of the following separate situations, determine the associated cost of inflation. (1) shoe-leather costs;...
For each of the following separate situations, determine the associated cost of inflation. (1) shoe-leather costs; (2) money illusion; (3) menu costs; (4) future price level uncertainty; (5) wealth redistribution; (6) price confusion; or (7) tax distortions. Wages of computer scientists always rise because our economy needs more and more computer scientist over time. A grandpa talked to his grandson, “When I was young, everything was so cheap. Now everything is too expensive.” Mary does not want to lend money...
Which inflation cost matters even if actual inflation and expected inflation are the same? losses in tax revenue O losses in real income production costs menu costs
Question 12 (1 point) Suppose the price level, as measured by the GDP deflator, is 1.14, the supply of money, measured by M1, is $3.4 trillion, and output, measured by real GDP, is $16.6 trillion. What is the velocity of money? Provide your answer as a number rounded to two decimal places. Do not include any symbols, such as "S," ", " "%," or "," in your answer. Your Answer: Answer Question 13 (1 point) Suppose the growth in the...
Question 37 (1 point) The shape of the aggregate demand curve is explained by the: O rate of inflation and the natural rate of unemployment. law of demand. policies to stabilize prices and reduce unemployment. interest rate, real balances, and foreign trade effects.
Question 37 (1 point) It can be cost-effective to pursue economies of scale only if: a) marginal product is diminishing. b) demand is small. c) demand is large. d) marginal cost is increasing. Question 38 (1 point) Cost per unit of output is also referred to as total cost a) False True Question 39 (1 point) Toyota spent over $1 billion to develop the Prius. For Toyota, the $1 billion was a sunk cost. a) True b) False
Question 33 (1 point) Which statement best explains why governments may prefer an inflation tax to some other kind of tax? The inflation tax falls mainly on high-income individuals. The inflation tax reduces inflation. The inflation tax is easier to impose. The inflation tax reduces the real cost of government expenditure. Question 34 (1 point) How can people avoid the inflation tax? by reducing cash holdings by not filing a tax return by spending less by reducing savings
The amount by which actual or expected sales exceeds break-even sales is referred to as contribution margin margin of safety unanticipated profit. target net income. Question 22 Cost structure cannot be significantly changed by companies generally has little impact on profitability. refers to the relative proportion of fixed versus variable costs that a company incurs. refers to the relative proportion of operating versus nonoperating costs that a company incurs Question 19 The break-even point is where total sales equal total...
Question 18 (1 point) Assume that the inflation rate during the last year was 1.97 percent. US government T-bills had the nominal rates of return of 3.54 percent. What is the real rate of return for a T-bill? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Your Answer: Answer units
Question 68 (1 point) Suppose a banking system has $ 125,000 of checkable deposits and actual reserves of $ 17,000. If the reserve ratio is 9% Excess Reserves in the banking system are equal to: $ (Put only numbers in your answer; do not put a dollar sign in your answer.) Your Answer: Answer Question 69 (1 point) Suppose a banking system has $ 120,000 of checkable deposits and actual reserves of $ 16,000. If the reserve ratio is 6%...
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