In the long run, persistent inflation in the United States is caused by
A. rightward shifts in the long-run aggregate supply curve and the leftward shift of the aggregate demand curve.
B. a faster rightward shift of the aggregate demand curve than the rightward shift of the long-run aggregate supply curve.
C. leftward shifts in both the long-run aggregate supply curve and in the aggregate demand curve.
D. leftward shifts in the aggregate demand curve while the position of the long-run supply curve is unchanged.
Answer: B
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The rule of 70 states that
A) the number of years it takes an economy to double in size is the growth rate times 70. B) the number of years it takes an economy to double in size is the growth rate divided by 70. C) it takes an economy 70 years to double its real GDP. D) the number of years it takes an economy to double in size is 70 divided by the growth rate.
Efficiency is defined as
A) the maximum consumption of goods. B) the production of goods and services. C) production of output at minimum cost. D) arriving at one's destination quickly.
Which of the following would lead to a decrease of the U.S. demand for euros?
a. A decrease in the U.S. interest rate, with no change in the European interest rate b. An increase in U.S. GDP c. Resurgence of interest in European precision tools d. Expectations of a rise in the dollar price of the euro e. A sudden increase in anti- European sentiment.
Explain why a balanced budget has an expansionary effect on the economy