When the aggregate demand curve shifts to the right, intersecting the aggregate supply curve on its upward-sloping or vertical segment,
a. demand-pull inflation occurs
b. cost-push inflation occurs
c. stagflation occurs
d. deflation occurs
e. the shift forces the price level to fall
A
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Purchasing power parity suggests that the exchange rate between two currencies reflects differences in the overall price levels in the two countries
Indicate whether the statement is true or false
Subprime borrowers ________
A) are those individuals who owe more on their mortgage than the value of their home B) possess a relatively low FICO score C) rely on mortgage-backed securities to support their mortgage applications D) are those with an income level below the value of their mortgage
For any given level of output:
A) marginal cost must be greater than average cost. B) average variable cost must be greater than average fixed cost. C) average fixed cost must be greater than average variable cost. D) fixed cost must be greater than variable cost. E) None of the above is necessarily correct.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.