One way inflation reduces aggregate demand is by:
A. increasing wealth.
B. increasing nominal GDP.
C. increasing velocity.
D. reducing real balances.
Answer: D
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According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency in circulation is counterfeit. As long as counterfeit U.S. currency remains undetected and in circulation, an increase in the U.S
inflation rate would essentially A) decrease the real value of the counterfeit currency. B) increase the nominal value of the counterfeit currency. C) increase the real value of the counterfeit currency. D) decrease the nominal value of the counterfeit currency.
If the government presets a price that turns out to be above the actual equilibrium price, a surplus will develop in the market.
Answer the following statement true (T) or false (F)
What is the purpose of a strike? What are the costs to workers and to management?
What will be an ideal response?
The net effect of a stronger dollar on real GDP is
A. dependent on whether the increase in aggregate supply is more or less than the decrease in aggregate demand. B. an increase in real GDP. C. an increase in the price level. D. a decrease in real GDP.