If the economy is experiencing an inflationary gap in the short run, an increase in the budget surplus
A) will reduce the size of the inflationary gap.
B) will increase the size of the inflationary gap.
C) will cause an increase in inflation and increase aggregate supply.
D) will increase aggregate demand and will increase the price level.
A
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Discuss the effects of government deficits on the current account
What will be an ideal response?
The value-added tax is a(n)
a. direct tax. b. indirect tax. c. flat tax. d. income tax.
Given a fixed nominal interest rate on a loan, unanticipated inflation:
a. decreases the burden of paying off the loan. b. increases the burden of paying off the loan. c. does not alter the burden of paying off the loan. d. benefits savers.
When an employer has a right to hire anyone, but every nonunion worker hired must join the union within a certain period of time, this is
a. illegal b. a union shop c. a closed shop d. an elastic shop e. a strike