When Inflation Is High

question 68

Multiple Choice

When inflation is high:

• A)people will increase their level of real-money holdings.
• B)people will save more.
• C)lenders gain at the expense of borrowers.
• D)people will decrease their level of real-money holdings.

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Definitions:

Flight Capacity

The maximum number of passengers or the amount of cargo that an airline can transport in a given period.

Collude

Cooperative behavior between firms in a market to set prices or output levels artificially high, typically in a way that is not in the best interests of consumers.

Maximize Profits

The process of increasing the difference between total revenue and total costs to reach the highest possible financial gain.

Identical Costs

Costs that are the same in value or magnitude for different firms or production processes.