If Inflation Is High, the Local Currency May Not Be

question 111

True/False

If inflation is high, the local currency may not be the most efficient unit of account.

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Definitions:

Marginal Benefit (MB) Curves

Graphs that show the additional benefit received from consuming one more unit of a good or service.

Law of Diminishing Marginal Utility

The Law of Diminishing Marginal Utility states that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Slope Downward

A graphical representation indicating a decrease or decline in a variable as another variable increases, common in supply and demand curves.

Coase Theorem

A principle in economics that suggests that if property rights are well-defined and trade is possible without cost, parties can negotiate to resolve externalities or conflicts over resource allocation efficiently themselves.