In which case would you be most likely to expect inflation to occur?
A) The government runs a sustained government deficit by lowering taxes.
B) The government runs a sustained government deficit by increasing purchases.
C) The government runs a sustained primary deficit by increasing purchases.
D) The government funds its sustained deficit by increasing the money supply.
D
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If the government decreases its purchases of goods and services by $12,000 and the MPS is 0.5, GDP and income will eventually decrease by
A) $2,400. B) $6,000. C) $24,000. D) $60,000.
Sellers are sure the demand for their product is relatively inelastic at the price currently being charged
A) could increase their net revenue by raising the price. B) could increase their total revenue by lowering the price. C) would decrease their net revenue if they raised the price. D) would decrease their total revenue if they raised the price.
If labor were completely mobile between Muncie, Indiana, and Lexington, Kentucky, and the cost of living was the same in each city, we would expect to find that
a. accountants in Muncie earn the same wage rate as garbage collectors in Lexington b. garbage collectors in Lexington earn more than accountants in Muncie c. garbage collectors in Muncie earn the same wage rate as accountants in Lexington d. all accountants in Lexington would earn the same wage rate e. accountants in Muncie earn the same wage rate as accountants in Lexington
Which of the following is a certificate of indebtedness?
a. both stocks and bonds b. stocks but not bonds c. bonds but not stocks d. neither stocks nor bonds