This topic contains a solution. Click here to go to the answer

Author Question: During an inflationary period, a household with savings of 100,000 A) loses because inflation ... (Read 99 times)

shenderson6

  • Hero Member
  • *****
  • Posts: 573
During an inflationary period, a household with savings of 100,000
 
  A) loses because inflation increases the real tax on the interest paid.
  B) gains because the inflation gives savers more money and so more purchasing power.
  C) loses because the inflation increases the after-tax real interest rate.
  D) gains because inflation increases the value of their savings.
  E) neither gains nor loses because inflation does not affect savers.

Question 2

What is the law of diminishing returns? Give an example of what the law of diminishing returns implies.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

whitcassie

  • Sr. Member
  • ****
  • Posts: 298
Answer to Question 1

A

Answer to Question 2

The law of diminishing returns is the observation that as the quantity of one input increases with the quantities of all other inputs remaining the same, output increases but by ever smaller increments. Hence, as more workers (or capital) are used by a firm, each additional worker (or unit of capital) increases output, but by less than previous worker (or unit of capital). For instance, a law firm might have one paralegal typing briefs on one personal computer. Hiring an additional paralegal will increase the number of briefs, but with only one personal computer, the additional paralegal will not double the number of briefs. Similarly, buying another computer, while employing only one paralegal, might increase the number of briefs typed, but will not double the number.




shenderson6

  • Member
  • Posts: 573
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)


recede

  • Member
  • Posts: 315
Reply 3 on: Yesterday
Excellent

 

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

When Gabriel Fahrenheit invented the first mercury thermometer, he called "zero degrees" the lowest temperature he was able to attain with a mixture of ice and salt. For the upper point of his scale, he used 96°, which he measured as normal human body temperature (we know it to be 98.6° today because of more accurate thermometers).

Did you know?

More than nineteen million Americans carry the factor V gene that causes blood clots, pulmonary embolism, and heart disease.

For a complete list of videos, visit our video library