The biggest problem caused by a deflation is that:
A. prices fall.
B. wages fall.
C. people cannot repay their debts.
D. interest rates rise.
Answer: C
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If supply increases and demand decreases, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. lower; uncertain B. higher; higher C. lower; lower D. higher; uncertain
To decrease the money supply using the reserve requirements, what would the Fed typically do?
A) let each bank get less currency from the Treasury B) raise the reserve requirement for banks C) reduce the reserve requirement for banks D) make each bank voluntarily set its own reserve levels
What does Ricardian equivalence imply about the relative size of the expenditure and tax multipliers?
What will be an ideal response?
Identify the correct statement about repeated negotiations from the following
a. Patterns in repeated negotiations can persist over time but are usually region-specific. b. The payoff from repeated negotiations is higher than that from negotiations which are unlikely to be repeated. c. Experience can help the parties understand each other's positions when negotiations involve previously unencountered issues. d. The greater the experience of the buyer the higher the benefits he realizes from a repeated negotiation.