When inflation occurs, consumers
A. realize gains in their wealth.
B. increase spending to catch up with higher prices.
C. automatically shift the consumption line upward.
D. suffer a decrease in real wealth.
Answer: D
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The quantity theory of money implies that over the long run, the inflation rate will ________
A) equal the nominal interest rate B) equal the growth rate of M2 minus the growth rate of real output C) equal the growth rate of M2 plus the growth rate of real output D) equal the velocity of money
In the figure above, with the tariff the United States imports ________ million shirts per year
A) 24 B) 8 C) 32 D) 16
In the 1980s, expansionary fiscal policy is believed to have crowded out
A) domestic investment as interest rates rose. B) exports and imports as interest rates rose. C) exports but not domestic investment as interest rates rose. D) domestic investment as interest rates fell.
The country of Mu has continuous strong economic growth and a persistently steady price level. This situation is most likely the result of aggregate demand growing ... aggregate supply
What will be an ideal response?