The adverse consequences of debt deflation are most evident ________
A) in the expansion of credit to high-risk borrowers
B) on the balance sheets of nonfinancial businesses
C) in a sharp decline in the real interest rate
D) on the balance sheets of financial businesses
B
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CANOES-R-US makes canoes. It buys the shell of the canoe from another firm for $300 and uses its labor and intermediate goods to make the canoe. It sells the finished canoe to a retail canoe store for $800. The retail canoe store then sells the canoe to a consumer for $1,200.
A) $1,200. B) $800. C) $500. D) $400.
The capital stock of an economy increases: a. whenever money in circulation is decreased. b. whenever gross investment is positive
c. whenever gross investment is negative. d. only if net investment is positive. e. only if gross investment is zero.
Which tool do economists use to determine the effect of an economic event on equilibrium price and quantity?
a. equilibrium price b. the four-step process c. demand schedule d. supply schedule
One of the goals of monetary policy is to make sure that the inflation rate and the overall rate of growth in the economy are the same.
Answer the following statement true (T) or false (F)