In Periods of High Inflation

question 59

Multiple Choice

In periods of high inflation,

• A)people want to hold as much money as possible
• B)the purchasing power of money is decreasing
• C)nobody wants to work and earn income
• D)low nominal interest rates are likely to result
• E)nobody wants to buy goods and services

---

Definitions:

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify.

Variable Costs

Costs that vary directly with the level of production or business activity.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Fixed Costs

Costs that do not change with the level of output or sales over a certain period, such as rent or salaries.