Question 1

The costs of changing price tags and price listings are known as

Accepted Answer

A)  inflation-induced tax distortions.
B)  relative-price variability costs.
C)  shoeleather costs.
D)  menu costs.E) A) and B)
F) None of the above

Question 2

The country of Lessidinia has a tax system identical to that of the United States. Suppose someone in Lessidinia bought a parcel of land for 20,000 foci (the local currency)  in 1960 when the price index equaled 100. In 2002, the person sold the land for 100,000 foci, and the price index equaled 600. The tax rate on nominal gains was 20 percent. Compute the taxes on the nominal gain and the change in the real value of the land in terms of 2002 prices to find the after-tax real rate of capital gain.

Accepted Answer

A)  -60 percent
B)  -30 percent
C)  30 percent
D)  60 percentE) A) and B)
F) All of the above

Question 3

The economy of Mainland uses gold as its money. If the government discovers a large reserve of gold on their land

Accepted Answer

A)  the supply of money decreases and the value of money rises.
B)  the supply of money increases and the value of money falls.
C)  the demand for money increases and the value of money rises.
D)  the demand for money decreases and the value of money falls.E) A) and B)
F) A) and C)

Question 4

Between 1880 and 1896 the average level of prices in the U.S. economy

Accepted Answer

A)  fell 23 percent.
B)  fell 4 percent.
C)  rose 23 percent.
D)  rose 50 percent.E) C) and D)
F) All of the above

Exam 30: Money Growth and Inflation

Correct Answer
verified

The economy of Mainland uses gold as its money. If the government discovers a large reserve of gold on their land

Correct Answer
verified

Between 1880 and 1896 the average level of prices in the U.S. economy

Correct Answer
verified

The costs of changing price tags and price listings are known as

Correct Answer
verified

Exam 30: Money Growth and Inflation

Correct AnswerverifiedShow Answer

The economy of Mainland uses gold as its money. If the government discovers a large reserve of gold on their land

Correct AnswerverifiedShow Answer

Between 1880 and 1896 the average level of prices in the U.S. economy

Correct AnswerverifiedShow Answer

The costs of changing price tags and price listings are known as

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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