Which of the following statements is NOT true about inflation?
A) Inflation is a sustained increase in the average prices of goods in the economy.
B) During an inflationary period, the prices of some goods will increase while the price of some goods will decrease.
C) When there is inflation, the purchasing power of a dollar decreases.
D) During an inflationary period, the prices of all goods will increase.
D
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If the required reserve ratio is 20 percent, the simple deposit multiplier is
A) 5.0. B) 2.5. C) 4.0. D) 10.0.
For markets to work well, there must be
a. market power. b. a central planner. c. property rights. d. abundant, not scarce, resources.
The short run is a period of time during which _____
Fill in the blank(s) with the appropriate word(s).
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline