Credit cards are a
A. store of value.
B. method of deferring payments.
C. medium of exchange included in both M1 and M2.
D. All of the above are correct.
Shoeleather costs refer to
A. the cost of more frequent price changes induced by higher inflation.
B. resources used to maintain lower money holdings when inflation is high.
C. the distortion in resource allocation created by distortions in relative prices due to inflation.
D. the distortion in incentives, created by inflation, by taxes that do not adjust for inflation.
Menu costs refer to
A. the distortion in incentives created by inflation when taxes do not adjust for inflation.
B. the cost of more frequent price changes induced by higher inflation.
C. resources used by people to maintain lower money holdings when inflation is high.
D. the distortion in resource allocation created by distortions in relative prices due to inflation.
A Chinese firm opens a watch factory in the United States.
A. This is Chinese foreign direct investment and by itself increases Chinese net foreign investment.
B. This is Chinese foreign direct investment and by itself decreases Chinese net foreign investment.
C. This is Chinese foreign portfolio investment and by itself increases Chinese net foreign investment.
D. This is Chinese foreign portfolio investment and by itself decreases Chinese net foreign investment.
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