If the monetary authorities persistently expand the money supply at a rapid rate, the probable result will be:
a. inflation
b. low nominal interest rates.
c. rapid growth of real GDP.
d. all of the above.
a
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Which of the following is an outcome of high and variable inflation?
a. Incentives in the economy to adjust in response to changes in prices are stronger. b. Penalties in the economy to adjust in response to changes in prices are weaker. c. Penalties in the economy to adjust in response to changes in prices are weaker. d. Incentives in the economy to adjust in response to changes in prices are weaker.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If a restaurant runs a special and sells a lobster dinner for $4.50, Amy buys one lobster dinner a week. If lobster dinners are not on special and the price is $16.00, Amy buys zero lobster dinners per week. Which of the following is true?
A. Amy's marginal utility from a lobster dinner is greater than $16.00. B. Amy's demand for lobster is inelastic. C. Amy's marginal utility from a lobster dinner is less than $4.50. D. The value of Amy's marginal utility from a lobster dinner is at least $4.50 and less than $16.00.
The fact that business cycles are recurrent but not periodic means that
A. the business cycle's standard contraction-trough-expansion-peak pattern has been observed to occur over and over again, but not at predictable intervals. B. business cycles last a predetermined length of time, but do not all follow a standard contraction-trough-expansion-peak pattern. C. business cycles occur at predictable intervals, but do not all follow a standard contraction-trough-expansion-peak pattern. D. business cycles occur at predictable intervals, but do not last a predetermined length of time.