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 Canadian central bank wants to keep the exchange rate of the Canadian dollar with the U.S. dollar constant over time. An increase in the demand for Canadian goods by American residents will lead the Canadian central bank to
A) sell American goods in exchange for Canadian dollars. B) buy more Canadian goods with Canadian dollars. C) increase the demand for Canadian dollars in the foreign exchange market. D) increase the supply of Canadian dollars in the foreign exchange market.
A country had a net capital outflow of $1.5 trillion and imports of $0.5 trillion. What was the value of its exports?
Under new Keynesian theory, a correctly anticipated decrease in aggregate demand will lead to __________ in Real GDP and __________ in the price level
A) a decrease; a decrease B) no change; an increase C) no change; no change D) an increase; an increase E) an increase; no change
The value of unpaid work by a homemaker ________ included in GDP and the value of housekeeping services sold in a market ________ included in GDP.
A. is not; is B. is; is not C. is; is D. is not; is not