An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Suppose the equilibrium price of cotton is $100 per ton. A price support set at ________ than $100 per ton ________
A) less; increases producer surplus B) less; increases consumer surplus C) more; increases consumer surplus D) more; decreases marginal cost E) more; creates a surplus that the government must buy
A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the highest point on his indifference curve
Indicate whether the statement is true or false
Any point on the aggregate demand schedule must also be
A) a point that clears the market for real money balances. B) a combination of real interest rates and income where aggregate desired expenditures is in balance. C) a point where money demanded is equal to money supplied. D) all of the above.
Which of the following is an example of speculative demand?
A. When the demand for housing increases, the demand for house insurance increases. B. When the actual price of housing increases, the quantity demanded of housing decreases. C. When the price of home ownership increases, the demand for rental housing increases. D. When the expected price of housing increases, the demand for housing increases.