Do deficits lead to inflation?
What will be an ideal response?
Governments can finance a deficit either by issuing bonds or creating new money. Some countries do not have to "monetize the deficit," but if creating money is the only option then those deficits will inevitably cause inflation.
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The basic aggregate demand and aggregate supply curve model helps explain ________ fluctuations in real GDP and the price level
A) long-term B) unrelated C) both short-term and long-term D) short-term
Economic models
A) are used to explain how people think. B) are used to explain how people behave. C) are essential representations of the real world. D) are never used for making economic projections or predictions.
Consider a $1,000.00 face value bond with a $55 annual coupon and 10 years until maturity. Calculate the current yield; the coupon rate and the yield to maturity under each of the following:a) The bond is purchased for $940.00b) The bond is purchased for $1,130.00c) The bond is purchased for $1,000.00
What will be an ideal response?
Recall the Application about how changes in supply affect the price of gasoline to answer the following question(s).Recall the Application. Suppose the price elasticity of demand for gasoline is 0.20 and the price elasticity of supply for gasoline is 0.55. If supply decreases by 50 percent, the equilibrium price will increase by:
A. 67 percent. B. 70 percent. C. 143 percent. D. 150 percent.