Demand-pull inflation can result when
A) policymakers set an unemployment target that is too high.
B) a persistent budget deficit is financed by selling bonds to the public.
C) a persistent budget deficit is financed by selling bonds to the central bank.
D) workers get numerous wage increases.
C
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Assume that one day's labor in England can produce either 20 units of cloth or 2 units of wine, while in Portugal, one day's labor can produce either 24 units of cloth or 12 units of wine. If England transfers 2 units of labor from wine to cloth and Portugal transfers 1 unit of labor from cloth to wine, the increase in combined output by those two workers will be
a. 16 wine, 8 cloth b. 16 wine, 16 cloth c. 12 wine, 12 cloth d. 8 wine, 16 cloth
If the dollar depreciates, the U.S. AD curve shifts _______________, the U.S. SRAS curve shifts __________________, and the price level will _________________________
A) rightward; leftward; increase B) rightward; leftward; decrease C) leftward; rightward; increase D) leftward; rightward; decrease
Each of the following is an endogenous business cycle theory except the ___________ theory.
A. innovation B. war C. monetary D. under consumption
Behavioral economists believe that people:
A. assess current and future options equally well. B. do not care about fairness, especially if it impairs their ability to get what they want. C. make errors in decision making because of problems such as bad information, but such errors are random and generally not repeated by the same individual. D. often succumb to temptation.