An Added Benefit of Inflation Is That It Allows for the Possibility

question 10

Multiple Choice

An added benefit of inflation is that it allows for the possibility of

• A)menu costs.
• B)aggregate supply shocks.
• C)negative real interest rates.
• D)recessions.

---

Definitions:

Risk of Loss

The potential for an asset to be damaged, destroyed, or lost, and the consideration of who bears this responsibility until the asset is delivered.

Insurable Interest

A principle requiring that a person purchasing insurance has a legitimate interest in the continuation of the life, property, or event insured, enough to incur a financial loss if the insured risk occurs.

Shipment Contract

A contract that requires the seller to arrange for the transportation of goods to the buyer, where the risk of loss passes to the buyer upon the seller's delivery to the carrier.

FOB Miami

A shipping term indicating that the seller of goods is responsible for them until they're loaded onto a vessel in Miami; from that point, the buyer assumes risk and costs.